PUBLIC TRANSIT CONNECTIVITY AND ITS IMPACT ON PROPERTY PRICES

Abstract

Public transport infrastructure has been a key area of investment by the government in major cities. In order to tap on the carrying capacity and convenience of intra-city train, expansion works of rail network is observed not only in high-density Asian, European and North American cities, but in Singapore as well. Even though existing housing literature has confirmed that proximity to train network has commanded a significant premium in property prices, less attention has been given to examine the impact of train connectivity on housing price. In light of continual rail expansion efforts in cities throughout the world, this paper seeks to study the effect of train connectedness on housing prices and determine the existence of a connectivity premium in Singapore’s context.

Empirical results have showed that there is an improvement in train network connectivity over the years. However, not all train stations benefit equally from overall enhancement in network connectivity. Hence, train connectivity is measured with respect to each train station. The connectivity index of individual station is then incorporated into the housing hedonic-pricing model to examine the impact of connectivity on resale HDB transaction prices, which are extracted from HDB InfoWeb.

The output of the hedonic-pricing model suggests that connectivity can account for 2.0% of public residential resale transaction price, after holding for several robustness checks. The results allow a deeper understanding of train connectedness in shaping transport policies relating to the Singapore rail system and equip the concerned public residential housing stakeholders with the appropriate knowledge on connectivity premium in property prices.