DOES ACCESSIBILITY TO THE DOWNTOWN CORE AFFECT HOUSING PRICES?

Abstract

Transportation and residential infrastructure plays a big role in our real estate landscape. Singapore’s Mass Rapid Transit (MRT) system is the backbone of the nation’s transportation system and much research has been done to establish the impact of MRT stations on the housing market. However, these findings limit the benefits of the MRT station to its locality and does not account for its place in the entire transportation network. Urban economics indicates that distance to the CBD does have an influence on housing prices and created the basis of this study. However, this study attempts to go beyond a point to point network system and to examine the connectivity of the transport network as a whole. In particular, this study seeks to discover if MRT stations with higher degree of accessibility to the Downtown Core which has an agglomeration of jobs, will have an influence on the Housing & Development Board’s (HDB) resale flat prices. By formulating an infrastructure based Connectivity Index which comprises of distance and quality of travel and comparing it with HDB’s resale flat prices, it is found that in general, for every increase in the Connectivity Index by one point leads to an increase of $288,947.41 in resale housing prices. Contextually, HDB houses that are 400 metres in proximity of Ang Mo Kio’s MRT station are expected to be higher than that of Yio Chu Kang’s MRT station, the adjacent MRT station by $19,985.67. In addition, the regression output shows that the North South Line has the highest sensitivity to a change in the Connectivity Index as compared to the East West Line which has the lowest. Thus, it is evident that accessibility to the Downtown Core via MRT lines does have an impact on housing prices.