EXAMINING AGGLOMERATION ECONOMIES IN LIVE-WORK DEVELOPMENTS

Abstract

This study seeks to explain why live-work properties cluster near other office properties despite being self-sufficient by integrating commercial and residential use in the same space. It examines the importance of agglomeration economies and how they affect the transacted prices of live-work properties. The dataset consists of 55 properties with 2 live-work, 27 commercial and 26 residential. Being a hybrid mixed-used development that combines commercial and residential, the reason for comparing live-work with residential and office properties is to identify the different impacts agglomeration economies have on the prices among the 3 different types of properties. A model is established to test the association using the pooled regression method. Agglomeration economies are measured by using the gravity model and to quantify their relationship with property price. The other characteristics of interest include property type, age, size, tenure, distance to MRT and CBD. The study reveals that live-work properties benefit economically from agglomeration, as agglomeration economies are reflected in the price. Also, agglomeration economies are capitalized in the prices of live-work properties when they are classified as commercial but not for residential.