URBAN RENEWAL AND PROPERTY PRICES: EVIDENCE FROM COLLECTIVE SALES IN SINGAPORE

Abstract

This paper examines the effect of en bloc sales on surrounding residential property values. Collective sales are one form of urban rejuvenation strategy which involves the participation of private developers. The process involves the whole purchase or amalgamation of strata-titled properties for the purpose of redevelopment. Since its introduction, the collective sales have attracted much controversy and debates due to the negative social repercussion which it has created. On the contrary, it is undisputable that it has fulfilled its purpose of optimising land in Singapore. It is a creative tool that helps to recycle underutilised land and has help alleviate the issue of land scarcity in Singapore to some extent. The results from this study are important to the stakeholders of collective sales. In particular, it helps to justify the effectiveness of the policy in economic terms. By using difference in differences (DID) methodology and using transacted prices obtained from Real Estate Information System (REALIS), the collective sale policy effects on property prices was evaluated, controlling for hedonic attributes, spatial and time fixed effects. The results showed that the collective sale policy positively impacts prices of non-landed private residential properties surrounding the collective sale site. Prices of the treated properties (those affected by collective sale) were transacted at 2.94% higher than control group (properties unaffected by collective sale). Further heterogeneity tests were conducted and they support the positive policy effects.