Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/220050
Title: DO GREEN DEVELOPMENTS COMMAND A PREMIUM IN SINGAPORE �S PRIVATE RESIDENTIAL MARKET
Authors: LIN ZICHAO SHAWN
Keywords: Real Estate
Issue Date: 1-Jun-2010
Citation: LIN ZICHAO SHAWN (2010-06-01T09:12:15Z). DO GREEN DEVELOPMENTS COMMAND A PREMIUM IN SINGAPORE �S PRIVATE RESIDENTIAL MARKET. ScholarBank@NUS Repository.
Abstract: The growing interest in sustainable/ green buildings began as early as 2005 with the ratification of the Kyoto Protocol. The green movement is not new in countries like the U.S and U.K but in Singapore, it is only slowly beginning to take place. Studies on the impact of green buildings have been numerous but its impact in the Singapore market is few. As such, this paper seeks to understand the premiums commanded by green private residential development in Singapore and also the market sentiments towards green buildings and how the sentiments can affect price.In land scarce Singapore, homebuyers will always seek to purchase homes that can maximize its value and hopefully allow them to sell the homes for a huge profit. Thus, any factor that buyers believe can play a part in increasing the house value, they would be willing to pay a premium for it, and the most common factor is location. With green buildings being relative rare in Singapore and with more studies showing its benefits, it is expected that homebuyers will be willing to pay a premium for it. To test the effects of green building, an ordinary least square regression is applied. Comparing transaction prices of green developments with non-green development comparables first does this. After which, a multivariate regression is used to test for the effects of the possible explanatory variables and how these variables together can affect transaction price.The key findings of this research showed that being green does command a premium of up to $29,000 but it is the amount the consumers are willing to pay to be in a prime location and freehold lease that still commands a higher premium. As such, while homebuyers are willing to pay more for a green home, it is more crucial for them to get a home that is in a good location and has a freehold lease. This led to the next part of the study to find out how developers market green homes, especially if it is not in a prime location. Due to the limited data availability, it may have affected the results of this study and as such it is further recommended that the same study be done but with its focus on a different country, where information is more readily available and transparent. All in all, this study was able to prove with full confidence that green buildings do command a premium. However the premiums are still relatively low as compared to other factors and it is dependent on developers to push these developments out to market.
URI: https://scholarbank.nus.edu.sg/handle/10635/220050
Appears in Collections:Bachelor's Theses

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