THE AMENITY VALUE OF WATER BODIES IN SINGAPORE � EVIDENCE BASED ON HOUSING PRICES

Abstract

This research paper posits that waterbodies have an amenity effect and thus, it seeks to explore if there is a price premium or discount on surrounding public residential houses within a 800m radius. It then delves deeper to examine the varied impact of different types of waterbodies, which are reservoirs, canals, rivers/lakes and quarries, and further analyse the individual waterbodies. The Hedonic Pricing Model was adopted for this study.

This study reveals that waterbodies in general have an average premium of 4.09% on prices of neighboring housing units. Different types of waterbodies- reservoirs, canals/rivers, lakes and quarries have 7.7%, 6%, 1.8% and -9.7% premium on prices respectively. In addition, this study also establishes that waterbodies with larger frontages have a higher average premium. As such, reservoirs command the highest premium amongst all. Waterbodies which offer a wider variety of family-friendly amenities also have higher premium.

Among reservoirs, Jurong Lake has a high percentage point difference compared to the other two because the potential of future development in Jurong Lake district into a second central business district (CBD) has been internalized in the housing prices. Among the canals/rivers, Alexandra Canal’s premium is also significantly higher than the others as the amenity value of such open spaces is higher in areas nearer to CBD and high-income areas.

Lastly, this study also deduced that the lack of amenities and the diminished effect due to Bukit Batok Nature Park located 2km away is the reason why Xiao Guiling has a price discount of 9.6% on its neighbouring housing prices. There is also a significant premium gap between Punggol Waterway and Punggol Park of 2.43 percentage points even though both waterbodies are located rather close to each other. This can be attributed to the fact that residential units near Punggol Waterway are designed to take full advantage of the waterfront under Punggol 21 vision, to becoming a vibrant waterfront town.