THE INFLUENCE OF A SHOPPING CENTRE ON RESIDENTIAL PROPERTY VALUE : "A TIMELINE" PERSPECTIVE.

Abstract

This study seeks to examine the influence a shopping centre on residential property price over three time periods — the pre-construction, construction and post-construction of the shopping centre. A controlled study, with respect to these stages, was conducted on the recently completed City Square Mall. It observed the differences in resale prices experienced by two public housing area — one located next to the shopping mall and the other located beyond the influence of the mall.

Hedonic Regression was utilized in the empirical study to isolate the influence of the mall’s presence on housing price. Three equations were estimated, each representing one time period, to uncover the mall’s impact during the different stages. It was hypothesized that the presence of a shopping mall would bring about a positive premium for residential units within its influence. However, these units might experience a drop in premium, or even a discount, during the construction phase due to the negative externalities incurred.

Results from the pooled linear regression showed that properties within the mall’s influence enjoyed a price premium throughout all three stages. This premium for the preconstruction stage is 8.4%, 12.7% during the construction stage and 6.5% in the completion stage. Contrary to expectations, the construction stage commanded the highest premium.

These findings would aid buyers and sellers better gauge the value of their unit located within the influence of the mall, aid property developer time their launches as well as valuation of residential units impacted by upcoming shopping centre. This study contributes to the research as it is the first formal local assessment of a shopping centre’s temporal impact on residential price, to the best of the author’s knowledge.