IMPACT OF SELECTIVE ENBLOC REDEVELOPMENT SCHEME ANNOUNCEMENT ON SURROUNDING HDB RESALE PRICES

Abstract

While the externalities generated by urban renewal have been extensively studied in overseas property markets, the effect of urban renewal in Singapore property markets are relatively understudied; most papers discuss the impact of urban renewal in the private sector, also known as, enbloc or collective sales, leaving out the effect of urban renewal in public housing. With a high proportion of Singaporeans living in HDB flats, there is a need to provide more information on Selective Enbloc Redevelopment Scheme (SERS) to reduce speculation and help Singaporeans make more rational decisions for older HDB units. This paper aims to fill the research gap by examining the effect of SERS on surrounding HDB prices and discussing probable causal effect of SERS on price. Apart from understanding the SERS effect on surrounding property prices, the papers also attempts to examine how SERS affect transaction volume as well as how external influences affect how SERS is received by the public. Through different model specifications, the positive treatment effect was consistently formed in varying radius zones. The baseline model specification estimates that the effect SERS on surrounding HDB resale prices was mildly positive with a 0.0244% increase in HDB prices for properties within 200 meters from a designated SERS site after the announcement. The positive effect became stronger as the radius was extended outwards. The regression results thus support the hypothesis that SERS has a positive spillover impact on HDB resale price.