IMPACT OF REGIONAL CENTRES AS ALTERNATIVE EMPLOYMENT CENTRES ON EXECUTIVE CONDOMINIUM PRICES

Abstract

This paper seeks to study the relationship between regional centres, as alternative employment centres, and the prices of executive condominium units in Singapore. The hypothesis of this research is that executive condominium units located within a regional centre commands a premium over units which are not. This hypothesis is operationalized by a quantitative research, in the form of a multiple linear regression model, and a qualitative research, in the form of a questionnaire survey.

It is found, through a hedonic analysis of 1828 resale transaction from 22 executive condominium developments, that executive condominium units located in Tampines Regional Centre and Jurong East Regional Centre command a premium of 2.2% and 3.5% respectively. According to the survey results, the premium associated with living in the regional centres comes from the residents who are willing to pay more to live closer to their employment centre. On the other hand, units that are located in Woodlands Regional Centre are sold at a discount of 3.6%. This is because of the negative externalities coming from nearby industrial estates and the lack of relevant jobs in the vicinity.

As an exploratory study delving into this topic, this study can serve as a guide for future researchers interested in studying the impact of the regional centre effect on the prices of properties in Singapore. Furthermore, the quantification of premium associated with the housing characteristics of executive condominiums will be of interest to valuers, developers, realtors, investors and homeowners.