THE INFLUENCE OF A REDEVELOPED PARK ON RESIDENTIAL PROPERTY VALUE: A "TIMELINE" PERSPECTIVE

Abstract

This study seeks to examine the impacts of the redeveloped park on residential property price over three time periods – the pre-construction, construction and post-construction period of the park. A controlled study with respect to these three stages was conducted on the recently redeveloped park – Bishan – Ang Mo Kio Park. It observed the differences in HDB resale prices experienced by two public housing areas – one located next to the redeveloped park, and the other located beyond the influence of the park.

Hedonic regression was utilized in the empirical study to isolate the impacts of the presence of the redeveloped park on housing price. Three hedonic regression equations were estimated, each represented one time period. By doing so, the impact of the redeveloped park during each time period could be uncovered. The hypothesis of the study was the presence of the redeveloped park would bring about a positive premium for residential units within its influence. However, it is expected these units might experience a decrease in premium or even a discount during the construction period, which is due to the negative externalities incurred.

Results from the pooled linear regression showed properties within the influence area enjoyed a price premium throughout the three time periods. However, the magnitude of premium varies at different stages. The highest premium was incurred during the pre-construction stage (22.6%). The premium decreased to 11.96% during the construction stage, and further decrease to 9.20% upon completion. These findings would aid buyers and sellers better estimate the value of their units located within the influence of the redeveloped park, aid developers to make right decisions on the timing to launch new projects in order to get the highest amount of profits. This study contributes to the existing research as it is the first formal local assessment of the influences of a redeveloped park on residential price, for the best of author’s knowledge.