IS THE VALUE OF CONSERVATION BUILDINGS CAPITALIZED INTO CONDOMINIUM AND APARTMENT PRICES?

Abstract

As a city-state with limited land space, Singapore faces the conflicting pressures between the need for redevelopment and the need for conservation. Resolving the conservation-redevelopment conflict requires not just creative solutions, but also the collaborative efforts between the government, the public and the private sector. Over the past decade, there is an emergence of modern condominiums and apartments which have integrated old conservation buildings into their redevelopments. At a development-level, this concept has to some extent addressed the conflict and found a balance between conservation and redevelopment. With more of these properties set to be developed and launched in the future, this paper attempts to determine whether the value of the conservation building is capitalized into the condominium and apartment prices. It also seeks to understand how the impact on price attributable to the presence of conservation building compares to the effect of the common housing attributes. Utilizing actual transaction records over a period of 9½ years, this paper has found that the presence of conservation buildings has a positive impact on condominium and apartment prices. The price effect is found to be larger in the resale and sub-sale markets as compared to the new sale and pre-sale markets. However, the price effect attributable to conservation buildings is still relatively small compared to common housing attributes like floor area and location.