WATERFRONT PRICE PREMIUMS: PUBLIC VS PRIVATE RESIDENTIAL MARKETS

Abstract

With vast opportunities for waterfront residential development which Singapore offers, it is pertinent to study the impact views of waterbodies on residential property prices. More specifically, greater emphasis was placed on residential developments along inland waterbodies such as canals and rivers. In addition, this study also examines both public and private waterfront residential in detail to account for the distinct nature of both markets. The analysis was done using quantitative methods such as hedonic regression models and comparison method. Thereafter, interviews were also conducted with industry professionals to seek further insights where information was unavailable on public new flats. The findings revealed waterfront views to have a positive impact on both new and resale flats in the public residential market. Using the hedonic regression model, public resale flats had a 2.3% premium per square metre (psm) for flats with a view of the waterbody while a simple comparison model showed price premiums for new public flats to range between 1.82% and 9.37%. However, interview respondents highlighted that price premiums in public flats could be influenced by neighbourhood features and factors such as accessibility to transport nodes. Similarly, private resale residential units exhibit a positive impact on prices for waterfront units compared to non-waterfront units. The regression model illustrated units with a view of the waterbody to have 4% premium psm. The type of waterbody was also a more significant factor in influencing the price premiums observed in the model. With regards to a higher price premium observed for the private resale market, interviewees cited reasons such as the developer’s original intent when developing such waterfront residential developments.