Relationship Between Property Prices and High-Speed Railway Services in Italy

The High-Speed Rail (HSR) in Italy began its services in 2009, initially serving the six main cities in the centre-north of Italy, along with other smaller cities with less frequent services. Currently, the number of cities reached by HSR services has increased tenfold from the start, and we can observe how this service has influenced not only travel behaviour but also the property market. The aim of this research is to find a relationship between property prices and the presence of an HSR station, the frequency and the travel time of HSR services. To this end, the methodology involves three main steps: data collection on HSR services and property prices, followed by the definition of a model to evaluate HSR effects on property values. The modelling process is based on a staggered difference-in-differences (DiD) method, applied using a two-way fixed effects (TWFE) model. This approach allows control for unobserved heterogeneity by accounting for time-invariant characteristics of the cities and common trends over time. The analysis reveals that property prices near HSR stations may decrease, primarily due to factors unrelated to HSR services, which have a stronger impact than the incremental changes in train frequency or travel times, reflecting the broader dynamics of the property market in large Italian cities. However, the introduction of HSR services helps mitigate these negative effects, suggesting that higher service levels balance out the initial decline.