THE IMPACT OF JURONG LAKE DISTRICT DEVELOPMENT ANNOUNCEMENT ON RESALE FLAT PRICES IN JURONG

Abstract

Jurong Lake District (JLD) is slated to become the second Central Business District (CBD) of Singapore, a national level project which requires extensive planning from multiple stakeholders. The time horizon for such a massive project is unsurprisingly long and serves to benefit Singapore immensely. This research analyses the impact of the JLD development announcement on the resale value of Housing & Development Board (HDB) flats in the Jurong East planning area, which reflects the market sentiments and value placed on JLD development. In order to analyse the causal impact, a difference-in-difference approach was employed to measure both the spatial (treatment zone within 400 metres of JLD vs. control zone beyond 400 metres up till the limit of Jurong East planning area) and temporal (before vs. after announcement) variations. The results have shown that there is a 4.8% increase in HDB resale value located in the 400m treatment zone after the announcement of JLD development plans. 4 different size of treatment zones was introduced to study the impact on housing prices in greater breadth. The positive impact is observed as well, for the other treatment zones specified. Research evidence provides a stronger understanding to the impact of urban planning considerations in Singapore and behaviour of residential transactions in response to a development. Given a positive impact on housing prices, decentralisation should be considered as a key urban planning strategy, in helping the nation to achieve its micro goals and macro visions.