IMPACT OF THE INCREASE IN POPULARITY OF MIXED-USE DEVELOPMENTS ON SURROUNDING PRIVATE PROPERTY PRICES

Abstract

In recent years, the increasing popularity of residential-retail, Mixed-Use Developments (MUDs) launches has drawn the attention of local homebuyers. A major leading factor of its current popularity stems from the accessibility and convenience to amenities it provides to the residents. New benchmark prices may be created in the five planning regions of Singapore, due to the amenities they bring. However, with more upcoming MUDs launches, the increasing housing supply might have created an unexplored impact on the relationship between MUDs and surrounding property prices. By examining the response of sellers and buyers to past launch announcement of MUDs, the impact of MUDs on surrounding private property prices can be capitalized. Through the use of the Difference-In-Difference framework, non-landed private property transaction data from the period of January 2011 to December 2015 were analysed to quantify the launch effect of MUDs on surrounding property prices in Singapore. Overall, the results show that surrounding property prices increases with the launch of MUDs. To further investigate the magnitude of the impact of MUDs, the data was evaluated separately for different property types, locations, and purchasers’ address indicator.