UNDERSTANDING THE PROXIMITY-PRICE AND SIZE-PRICE EFFECTS OF SUBURBAN MALLS ON HDB RESALE TRANSACTIONS

Abstract

This paper seeks to investigate the proximity-price and size-price effects of suburban shopping malls on the neighbouring Housing & Development Board (HDB) flats, and whether these effects vary across different distance interval zones from the mall. Due to the lack of local literatures on effects of malls, this study aims to ascertain the effects of suburban mall as a locational externality to the housing prices in the vicinity. The following hypotheses were formulated; firstly, proximity to suburban malls command a price premium on surrounding HDB resale flats; secondly, size of suburban malls has a positive price effect on surrounding HDB resale flats; lastly, whether the proximity-price effects vary across different distance interval zones. A total of 5406 HDB resale transaction data and ten suburban malls were obtained for regression, over the three-year transaction period from 2016 to 2019. HDB blocks within the linear distance of 600 metre from shopping were extracted out from OneMap.sg and HDB Resale Flat Database and selected for this study. Double log function was specified for the hedonic model regression, which contains a vector of structural, locational, neighbourhood and time variables. Regression findings revealed that proximity and size of suburban shopping malls are highly desired when in close proximity to the shopping mall. When stratified into various distance intervals, the regression coefficient of the proximity and size factors of the shopping mall were not consistent with the hypothesized signs.