IMPACT OF LRT ON RESIDENTIAL PROPERTY VALUES CASE STUDY: BUKIT PANJANG

Abstract

The role of the transit system in influencing property values in the vicinity of the rail line has been of great interest to many researchers. Historically, there were studies that demonstrated the theory that property value and transport investments go hand in hand Changes in residential values may arise because access has been improved, privacy intruded, congestion increased or pollution intensified This paper seeks to examine the impact of the LRT on residential property values proximate to the stations at Bukit Panjang New Town. Two hypotheses were evolved where HDB residential units that proximate the LRT stations command higher sales price due to improved accessibility and that the extent of the impact on the units vary with the distance to the station The influence of the transit line on property values is measured prior to the announcement of construction in May 1996. By incorporating time variable to shield the effect of time on the prices, dummy variable is used to compare sales prices of residential units that are within a radius of 400 meters from the LRT station (influence area) to that of the sales prices outside the boundary (control area). Then a cross sectional analysis is undertaken to quantify the increased property value of the HDB flats where the line passes through. Both of the hypotheses were accepted as statistical results showed that the sales prices of HDB units in the influence area differ significantly from the sales prices of those in the control area and that the influence varies with distance to the station The next round of analysis determines the validity of the regression model Three tests, tests for normality, multicollinearity and heteroscadasticity were conducted. The results supported the assumptions of homoscadasticity, there was no association among the independent variables and that the error term was normally distributed