THE PROXIMITY EFFECTS OF NEW GENERATION NEIGHBOURHOOD CENTRES ON HDB RESALE HOUSING PRICES

Abstract

As the HDB continually seeks to provide modern facilities for its residential towns in line with its mission of providing quality and affordable housing in Singapore, New Generation Neighbourhood Centres (NGNCs) usher in a new era of commercial neighbourhood amenity unlike its predecessors. Having evolved from traditional shophouses into lush mixed used developments equipped with advanced building technologies and a modern retailing experience, neighbourhood centres (NCs) represent an irreplaceable and pivotal aspect of Singapore’s urban fabric. While the popularity and advantages of the NGNCs are apparent, they cost more to develop and occupy a niche and precarious position in an extremely competitive retail landscape. From a governance perspective, it is paramount to consider whether the additional cost required to build these centres are justified and glean insights into how the property market values this new amenity. The objective of this paper therefore seeks to investigate the proximity effect rendered by the NGNCs (Oasis Terraces and Buangkok Square) on surrounding public residential properties. Utilising HDB resale transaction records from February 2019 to June 2020, the study found that the average price of flats located within a 400 metres radius of NGNCs command a 7% price premium over flats surrounding traditional NCs in the same radius. The study reports that NGNCs are a significant contributor to housing price and empirically validates the value of being proximate to these centres. The outcome of the paper is useful in helping policy makers and planners make informed decisions on upgrading older NCs as they come of age and whether more of such centres should be constructed as new towns are planned amidst an ever increasing demand for housing.