GOLFERS, GOLF COURSES AND REAL ESTATE VALUES IN SINGAPORE

Abstract

Golf courses are known in the existing literature to create value premiums for property in its surroundings. This study extends this knowledge by empirically testing if golfers and non-golfers will pay different premiums, when they make the housing purchase decisions. The dataset used consists of 84,152 non-landed private property transactions in Singapore, of which golfers’ transactions make up 11,827. Using a hedonic pricing model controlling for location of houses and golf courses, time fixed effects, the data show statistically significant price premiums within a range of 1.02% to 1.24% that golfers have paid for real estate in proximity to golf courses. Golfer characteristics such as Handicap Index (an indicator of leisure versus serious golfers) and Club Membership fees are used to proxy golfer motivations, such as loving the game and being good at it, as well as investing in an expensive golf club membership or desiring for the convenience of staying nearby. The regression results show that these motivations and buyer attributes show a statistically significant price premium of 0.21% to 3.86% for golfer-buyers with certain characteristics. Causality is further tested using the event study methodology with two announcements affecting two of the subject golf courses that serve as exogenous shocks. The positive shock resulted in a statistically significant price premium of 1.35% to 2.71%; while the negative shock did not give conclusive results. We believe these findings are of interest to developers, buyers and sellers of properties in proximity to golf courses when making pricing and purchasing decisions.