THE VALUE OF CONSERVATION AREA: EVIDENCE FROM SURROUNDING PROPERTY PRICES.

Abstract

The conflict between redevelopment and conservation is a problem that has bothered Singapore for so many years. On the one hand, Singapore is a country with scarce land resources, and redevelopment is an important strategy to provide land for commercial and residential development. On the other hand, the government needs to protect Singapore's heritage building and culture. Therefore, it is essential to evaluate the conservation area from different perspectives to ensure the conservation plan is successful and to avoid over conservation problem. The change of property transaction prices is a good indicator which reflects an area's economy. This study thus aims to analyse whether the conservation area affects its surrounding property and what is the type of relationship between them.

The principal methodology in this paper is the Difference in Differences method as it is a good design to analyse causal effects and can automatically remove confounder’s effect. Based on the results of this study, there is insufficient evidence to say that conservation area affected retail and office property prices. But results show all conservation areas have statistically significant impacts on their surrounding residential property prices. Under the analysis, Tiong Bahru conservation area decrease the surrounding residential property prices. However, Jalan Besar conservation statistically significant positive impact on the surrounding property prices. This result shows that different conservation areas have different impacts. It also suggests that the government need reconsider whether to conserve Tiong Bahru area or not as the results showed this conservation area hurt the local economy.

Keywords: Conservation Area, Property Transaction Prices, Difference in Differences