PROXIMITY EFFECT OF INDUSTRIAL PROPERTY ON PUBLIC HOUSING PRICES

Abstract

Industrial properties contribute to many different negative externalities to residents living in its proximity. This research is the first to analyse the impact of the proximity of industrial properties on public housing (HDB flats) prices in Singapore’s context. A proximity analysis via the Hedonic Pricing Model will be used to analyse the proximity effect of industrial properties. Through this analysis, seven distance bands of 100-metre intervals will be assessed and compared. This quantitative analysis will then be followed by a qualitative analysis, through semi-structured interviews, to study the resident’s perception of nearby industrial properties and uncover reasons to any anomalies or variations in the regression results.

Through the multiple linear regression model, the effect of industrial properties on public residential prices was controlled for spatial, structural, and temporal aspects. The research found that HDB resale prices increased with increasing distance to industrial properties, with a 2.39% increase in price from the closest distance band to the furthest distance band researched. Qualitative interview findings through a thematic analysis also provided reasons for distance bands with less significant results, providing support to the quantitative analysis.

The Urban Redevelopment Authority (URA) and the National Environment Agency (NEA) currently imposes a 50-metre minimum “nuisance buffer” between industrial and residential properties. The research findings provide critical planning implications to aid in dampening the effects of negative externalities on residents that live in proximity to industrial properties.