EXTERNAL PRICE EFFECTS OF AESTHETIC ARCHITECTURE: EVIDENCE FROM SINGAPORE

Abstract

As more aesthetically striking private residential architecture are constructed alongside their duller and largely monotonous public counterparts in the heartland areas, it has manifested in a clear distinction within the housing landscape. While the new awe-inspiring residential architecture provides reprieve from an otherwise unvarying and uninspiring landscape, their very presence may further emphasise the physical attributes severely lacking in public housing developments. This paper is hence an attempt to contribute to the existing literature gap by quantifying and analysing the pricing impact of proximity to aesthetic residential architecture on the public residential market in Singapore. Aesthetic residential architecture were identified based on design awards won, while treatment and control groups comprising of HDB resale units situated 0-200m and between 200-1000m away from the aesthetic architecture respectively were established. To ascertain the net treatment impact of proximity to aesthetic architecture on resale prices, the difference-in-differences approach was utilised. Further investigations were carried out to draw a comparison of the treatment effect between: the completion date and the award date of the aesthetic architecture; various age groups of HDB resale housing; various treatment distance limits; and single- and multiple-awarded aesthetic residential projects. The results indicated an overall negative relationship between demand for public resale housing and the proximity to aesthetic architecture, with the impact amplified for shorter treatment distance limits, as well as following the award date as compared to completion date of the aesthetic architecture. The degree of adverse impact is also greater when the subject aesthetic residential architecture has won multiple awards, or when the surrounding HDB resale units are significantly older. The earlier revelations present significant planning implications. For urban planners, more comprehensive efforts could be taken to transform older housing developments in terms of design quality. For real estate developers, they could take more proactive steps following the government’s call for increased open-plan residential developments. Through the fruition of the proposed policies will it then potentially pave the way for a more equitable society.