Impact of Large-scale Construction Projects on Real Estate Markets

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This dissertation investigates how the announcement of different large-scale construction projects impacts land values of multi-story residential buildings in Hamburg, Germany. Applying a difference-in-difference approach the study finds that land values within a radius of 1,200 m, 3,000 m, or 6,000 m may experience either positive or negative effects. The impact of large-scale housing construction projects depends critically on how they are expected to change existing amenities and disamenities. We uncover price changes in land values spanning from -4% to +22%. The expansion of the harbor in Hamburg impacts land values between +2% and +10%, the effect depends on how the demand for housing changes. The impact of dominant employers on land values also depends on how they influence the local demand for housing, spanning from -52% to +45%. The study shows that projects with an overlapping area of impact should be considered in one regression and that projects that are located far from one another can be analyzed in one or in separate regressions.