LOCATION AND SIZE: DO THEY MATTER IN UNDERSTANDING PRICE APPRECIATION RATES?

Abstract

This dissertation examines the variation in the rates of price appreciation within the Singapore non-landed private residential market. It attempts to answer the 2 research questions of whether properties in different locations appreciate at a significantly different rate from the market; and whether properties of different sizes appreciate at a significantly different rate from the market. The repeated sales methodology is adopted for this study. The period of study would be from 1995 to 2013. This time period would be further divided into 2 sub periods: 1995 to 2008 and 2009 to 2013 to understand the effects of the cooling measures which were implemented after 2009. The results of the analysis suggest that prime districts appreciated less per year than the rest of the market for the 18 year study period. However, results indicated that when the period of study was shortened, properties in these districts appreciated more per year than the rest of the market. This may reveal that properties situated in the prime areas are affected more adversely by the cooling measures implemented. Also, it was found that districts in the fringe areas experienced positive appreciation when considering the 18 year study period but instead experienced negative appreciation relative to the market instead when the period was shortened. This may indicate that properties in such districts are more resilient to the cooling measures implemented. This study also found that largest size category appreciated the most per year, on average, relative to the market while the properties in the smallest size category appreciated least, on average, per year relative to the market for both time periods. Going forward, time and resources should be allocated to researching if similar price appreciation rates are observed in the public residential market. Other attributes of properties, such as the property value, may also be studied.