In recent years, environmentally-friendly, sustainable, and compact development has become increasingly popular with governments. An extensive body of literature has focused on the influence on housing prices from an economic perspective. Although residential urban planning from the perspective of individual needs must be considered, little attention has been paid to residents’ demands in high-density and compact urban areas. In this study, we selected Hong Kong as the case and adopted a reliability interval method to rank residential attitude metrics, which indicated residents’ neighborhood needs in densely populated cities. The influences of location attributes on residents’ demands and residential value were compared. A hedonic price model was used to estimate the impacts of the attributes on housing prices. The results showed that both access to metro stations and median household income had important influences on residents’ preferences and housing prices. However, access to the central business district contributed largely to housing prices but not to residents’ attitudes. These findings support urban planners and policy makers during sustainable residential planning and policy formation by understanding residents’ needs in compact urban areas, help them to optimize the match between housing attributes and residents’ expectations, and balance the relationship between residents’ needs and economic interest.

Compact cities adopt high density, mixed land use and transit-oriented development (TOD). For sustainable development, compact development reduces the use of automobile and lessens the overdevelopment of land resources. For solving urban sprawl and housing shortage, more and more metropolises have adopted compact development. Academics, planners and policy makers mainly focused on evaluating the impacts of neighborhood attributes on housing prices and residential movements. Few have examined the relationships between residents’ demand and residential attractiveness in compact cities. Therefore, this study develops Residential Attractiveness Evaluation (RAE) Model to evaluate the attractive degree of urban areas based on residents’ demand in compact cities. Hong Kong is chosen as the study area which is a typical compact city. The results show that districts near the CBD and both sides of Victoria Harbor have highest residential attractiveness than other areas. Community planners and policy makers should consider residential attractiveness based on residents’ demand in efforts to promote sustainable development. Residential attractiveness is the foundation of residential land use planning and policies. Planners in compact cities should adopt various planning strategies according to different residential attractiveness. Moreover, residential attractiveness is the benchmark of evaluating residents’ satisfaction of new residential planning and policies.