DOES PROXIMITY TO CONDOMINIUM LEADS TO A HIGHER HDB HOUSING PRICE?

Abstract

This study examines the impact of new private condominium in Singapore with regard to the value of public housing in its vicinity. A hedonic price model is employed to decompose the price of HDB flats into structural, locational and neighbourhood components, where distance to a new condominium project is used to measure the impact of new condominium on public housing. The data comprises HDB resale transactions from September 2008 to August 2009 as well as 3 condominium projects namely, La Casa, Rosewood and The Calrose. They have been chosen because they are all new condominium projects. The regression results confirmed the structural characteristic of housing attributes on housing prices. For instance, housing units located on higher floor level generally command higher prices, while larger and newer flats are comparatively more expensive than smaller and older flats. The regression results also show that property price increases by 0.024% and 0.067% for every 1% increase in distance away from La Casa and The Calrose respectively, but property price near Rosewood decreases by 0.023% for every 1% increase in distance away from Rosewood. In addition, the findings show that a new condominium project has an insignificant negative impact on housing values. It suggests that scattered high income housing projects have no significant impact on neighbourhood property values. However, it is recommended that further research could examine whether clustering of high income housing projects may lead to a significant impact on prices of HDB flats.