UNDERSTANDING THE IMPACT OF PARK REDEVELOPMENT ON PRIVATE RESIDENTIAL PROPERTY PRICES

Abstract

Using data of condominium transactions from selected condominium developments within the Bishan planning area, this study seeks to assess the impact of park redevelopment and the extent of its value capitalisation into surrounding private condominium prices. Specifically, the study aims to find out the impact of the Active, Beautiful and Clean Waters Project, which was initiated by the Public Utilities Board (PUB) of Singapore in 2007. The currently on-going scheme consists of around 150 projects across the whole of Singapore, to be carried out in phases. The entire scheme is to be completed to 2030 and to date, 20 pilot projects have already been completed. This paper has chosen to assess the ABC Waters Project @ Bishan-AMK Park, as Bishan-AMK Park is a widely popular park in Singapore with a high annual visitor rate of 3 million. Furthermore, the scope of this project is relatively larger as compared to the other completed pilot projects. The Government had expended USD$ 60 million on the project alone. In light of the various greening initiative worldwide, the paper would provide the economic justifications for government expenditure on provision of quality greenery. The study found that a park premium of 3.88% was seen within one quarter following the announcement. Upon construction commencement, however, park premium decreased by 2.5%. Park premium decreased in the first quarter post-completion of the revamped park by 5.43% despite property price increases in the control area. The study argues that there might be a delayed response to the positive externalities generated from the revamped park, which was apparent only two quarters post-completion from the park premium increase of 5.69% despite falling property prices in the control area.