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Abstract
This paper assesses the relationship between infrastructure development and housing market development, thereby focusing on major new infrastructure linking previously separate housing markets. This is often the case when bridges or tunnels provide for new connections in island regions or delta areas. Empirical evidence is presented for a case in the Netherlands: the construction of the Westerschelde Tunnel. This tunnel resulted in rather dramatic changes in accessibility and centrality. The tunnel connects the previously separate central and peripheral housing markets of southern Zeeland, and turns out to have a different impact on both areas. On the basis of the hedonic regression method, we found – quite unexpectedly and in marked contrast with the literature – that the increased accessibility in the more central region led to an increase in house prices, whereas increased accessibility in the more peripheral region subdued the house prices, all other things being equal. This was not due to less demand for houses in the periphery compared to the centre, but rather due to qualitative differences in demand. Households which moved to the centre were comparatively younger, more active in the labour market and more often included children.