VALUE TRENDS OF RESIDENTIAL SHOPHOUSES IN SINGAPORE

Abstract

Shophouses are gradually being looked upon as something soon to be of the past. Recent trends have shown signs of interest on the part of individuals to purchase shophouses for residential use. It is these trends that prompted a research to look into the factors that are likely to affect the prices that purchasers are willing to pay for the shophouses. To this end, the multiple regression technigue is adopted. Since the economic recovery in 1978, property prices began to soar from early 1979 till they peaked in mid 1981. This phenomenon stimulated the interest to look into the price trends of these residential shophouses from 1978 to 1983 to see if they had moved in similar directions. Projection of these trends into the immediate future will also be carried out. It has been found that the two main factors that determine prices that purchasers are willing to pay are time of purchase and size of property. Factors like tenure, zoning and permitted density of sites are found to be unimportant in the determination of prices paid. The influence of location of the property on prices paid is found to be important too except that this influence is superseded by other more important factors like the threat of compulsory acquisition, for example. Generally, the price trends of these shophouses are on the rise irrespective of the locations of the properties. Projected values till 1989 indicate the likelihood of continuingly increasing trends but the magnitudes of the increases are thought to be more conservative than projected due mainly to the oversupply of all types of properties in this period (from 1985 to 1989).