IMPACT OF COMMERCIAL CENTRES ON SURROUNDING PRIVATE RESIDENTIAL PROPERTY PRICES

Abstract

To mitigate demographic challenges, climate change and digital disruptions, Singapore is constantly undergoing spatial changes. This paper seeks to study the relationship between the government’s decentralisation efforts through the emergence of Regional Centres (RC) on transacted non-landed private property prices. The dual nature of RCs as both a positive and negative externality will be addressed too. Hedonic regressions reveal that Singapore still demonstrates strong monocentric behaviour, as the development of RCs does not have a profound impact on the traditional Central Business District (CBD). Results have also shown that a price premium is not observed for properties located within all three RCs, with the exception of Jurong East RC. This could be due to the fact that Jurong is being positioned as Singapore’s second CBD. Finally, it is evident that the three RCs have been successful individually but have yet to achieve their full potential. Proximity to RC is not a principal consideration for homebuyers as reflected by the price discounts recorded even within 2km of Tampines and Woodlands RC. As it is the long-term strategy of the government to continue to drive decentralisation in Singapore, this study could serve as a guide for future academic researchers and urban planners, developers, property investors and homeowners.