IMPACT OF ANNOUNCEMENT OF GOLF COURSE CLOSURES ON SURROUNDING RESIDENTIAL PROPERTY PRICES

Abstract

Land constraints have forced Singapore to adopt effective planning and efficient land use policies since its independence. Unfortunately, while a golf course exudes a bundle of positive environmental amenities, such as providing views and green spaces, they constitute as low productive yet land-intensive facilities. Within the last decade, several golf courses are set to be reclaimed by the State and consolidated for new developments of the “highest and best” use of our scarce land resources.

This paper aims to examine the impacts of announcement events of such closures across Private and Public housings resale prices within the vicinity of the golf courses.

To establish the causal impacts, hedonic difference-in-differences regression methodology is used to compare the effects of the announcements on a treatment group located within 1 km of the subjects, in contrast with the controls between 1 to 2 km.

It is initially hypothesised that a discount will be associated with the closures, which will vary between the two property types; along with the assumption that properties on sites with longer lead times between announcement and actual close would better retain their values.

A total of four golf courses that had, or will close within a 10-year timeframe, consisting of 2,223 Private resale data and 4,770 HDB transaction data were used in the study.

The empirical results found insufficient statistical evidence to support the claim that a difference exists between the two study groups after the respective announcements. In other words, it can be said that the announcement events had no significant impacts on the housing prices. Consequently, the claim that the effects differ between the two groups could not be fully ascertained.