IMPACT OF JURONG EAST REGIONAL CENTRE ON CONDOMINIUM PRICES

Abstract

Under Singapore’s current planning regime, the development of regional centres (RCs) is an important tool for generating economic growth in decentralised areas. We study the impact of such RCs on housing prices in their proximity. In particular, we focus on the Jurong East RC whose blueprint was announced on 4th April 2008 as a means of revitalising development in the western area of Singapore. Our strategy is to determine if a price premium exists for housing located within the influence area of the Jurong East RC compared to similar housing that is outside the influence area. The influence area lies within a 800m radial range of the RC. We use hedonic regression analyses based on 5,473 transactions in 10 condominiums over a 10-year study period. There is evidence of higher price premiums for condominiums in the influence area compared to units in the control area of approximately 29% after the announcement date. Although part of the premium maybe amplified by the low base value effect, there is nevertheless a case for the RC as a planning concept that can help lever up housing prices by the anticipated provision of amenities and other economic benefits.