Waleed Babary

Do Properties Near Subsay Stations Retain their Value Better than the Rest? - An Empirical Analysis of the Ontario Fair Housing Plan ©2018

The real estate market in Toronto has grown rapidly in the past few decades. New developments in the suburbs as well as the downtown core have been promising and safe investments for foreign and domestic investors alike. However, the spike in property values initiated the provincial government to intervene by imposing a tax on foreign investors through the Ontario Fair Housing Plan (OFHP) in effort to cool down the rate at which prices were rising. Thus, causing overall sales to drop and the average rate of increase to decline (Toronto Real Estate Board, 2018). This research looks to investigate whether condominiums within walking distance to subway stations hold their value better to policy changes over time than their counterparts. Using the econometrics difference-in-difference model, I find that property values of condominiums within walking distance to subway stations in Toronto are not more resistant to policy changes than their counterparts. Namely, the difference-in-difference price is not statistically significant. Therefore, the premium paid on a condominium near a subway station is not recouped in the event of a policy intervention.