GEOGRAPHICAL PATTERN OF LEASE DECAYS ACROSS THE HDB TOWNS

Abstract

Singapore public housing is also known as HDB is a leasehold property. The length of the remaining leases plays an important role in housing transactions. As mentioned by Prime Minister Lee Hsien Loong in National Rally Day (2018), he confirmed that HDB is a depreciating asset. Many homeowners are concern over the impact of the length of the remaining lease on housing value. This paper aims to investigate the relationship between the transaction price of HDB unit and the lease depreciation rate in different geographical locations. For the empirical analysis, a compilation of past HDB transaction data from 2015 to 2018 was used in the hedonic pricing model. Moreover, the paper corresponds to the existing literature reviews by identifying possible attributes in affecting housing transaction price. The findings conclude that the lease depreciations are different geographically but there is no defined pattern of lease depreciation.