DOES PROXIMITY TO THE EXPRESSWAY AFFECT CONDOMINIUM PRICES? A COMPARISON BETWEEN UNDERGROUND AND ABOVEGROUND EXPRESSWAY

Abstract

Land constraints have been an important issue and Singapore constantly requires new solutions to better utilise the limited land resource. The government is currently studying the potential for an underground road network in downtown Singapore. An underground road network may have a potential relationship with residential properties located near to it. The purpose of this study is to examine the expressway impact on housing prices. This entails studying the underground and aboveground segment of Kallang-Paya Lebar Expressway (KPE), the subject for this study. The scope of the study covers condominium transaction prices within the vicinity of the KPE. The Hedonic Price Model is adopted to unravel the impact of the underground and aboveground segment of the expressway on housing prices The findings indicate that condominiums within close proximity to the underground segment of KPE witnessed an 8.65% increase in prices. A 1.11% increase was observed in properties located in proximity with the aboveground segment. This means that properties along the underground segment has a premium which is eight times higher than properties along the aboveground segment. This validates that the underground segment of the expressway creates a greater positive influence on housing prices as compared to the latter. This is attributable to the externality of reduced noise and increased accessibility. An implication of the study is that the increase in property values near to an expressway will encourage investors who are interested in capital appreciation. Additionally, this may fuel speculations and lower housing affordability for certain groups of people.