ATTRIBUTES OF MRT LINES: EFFECT ANALYSIS ON RESIDENTIAL VALUES

Abstract

The impact of MRT on residential values has been a common topic for many research studies. However, most examined the impact on individual MRT lines and mostly stuck to the private residential sector. Little has been done in terms of understanding the impact of MRT on the public residential sector. This research study is thus set apart from others as it will further delve into the effect induced by the individual attributes of an MRT line in proximity on both the private and public residential sectors. In order to analyse these effects, the Difference-in-Differences (DID) model was first employed to establish the relationship between MRT lines and surrounding residential values. Following after, the expanded Difference-in-Difference-in-Differences (DDD) statistical model was used in examining the effects caused by the two identified individual attributes of the MRT lines (major MRT lines and MRT lines that serves towards the city centre). Results show that there is significant effect generated by the individual attributes on surrounding residential units with more opening effect found for HDB units as compared to the non-significant opening effect results of the private sector. However, it was observed that the private sector experienced more significant anticipation (announcement) effects instead. Major MRT lines generally induced a significant negative premium (-9.88%) while the MRT lines that serves towards the Central Business District (CBD) was found to induce a significant 7.64% positive premium for the HDB sector. This research study will be able to provide insights for various key players such as urban planners, valuers, property agents and home buyers. The perceived effectiveness could be examined and applied for future MRT expansion while the other three players will be able to better estimate the value of the MRT lines, even though there were some notable limitations.