CHANGING PHENOMENON OF GREEN MARK PREMIUM AND ITS PRECEDENTS ON SKYRISE GREENERY

Abstract

In the light of environment sustainability, most governments have introduced policies to promote green buildings. Although existing literatures confirmed the benefits of green buildings and the significant premium they can command in property prices, limited attention has been given to examine how premium changes over time. This paper aims to study the relationship of Green Mark and housing price by examining the change in Green Mark premium over time as well as to test how increased supply can cause the change in Green Mark premium across different quantiles in the Singapore’s residential market. Additionally, the paper will also help to draw insights to similar government initiatives such as skyrise greenery. Mean and quantile empirical results have revealed an average Green Mark premium of 2.2%. However, Green Mark premium changes significantly from 4.2% in its initial phase to 0.83% in recent years. The magnitude of the decrease is greatly reduced when supply of Green Mark projects in each planning area is controlled. This suggests that increased supply of Green Mark projects due to the various supply-side policies have caused Green Mark premium to decline. The premium for skyrise greenery is negative and the findings further revealed that buyers perceived it only to be an additional benefit. The results provide a deeper understanding for the current market situation of Green Mark and skyrise greenery which provide policy makers with important knowledge for them to make key decisions to regulate the sustainability of Green Mark and the market for skyrise greenery.