THE IMPACT OF WATERFRONT VIEW ON RESIDENTIAL PROPERTY VALUE

Abstract

The soothing effect derived from an aesthetically pleasing view of a water body is one of the reasons why waterfront real estates are highly sought after, especially for residential properties. Intuitively, an unobstructed waterfront view should enhance the value of a property. However, there has been relatively little emphasis in research on the impact of waterfront view on property values. This paper will, after examining previous literature, analyse the economic worth of five different water views in separate locations around Singapore using the hedonic price model. The results will show that all five types of waterfront view selected have a positive impact on residential values, thus concurring with the findings of majority of the previous studies conducted. Particularly, an unobstructed view from the Kallang River bay will enhance property value by an average of 9.4%. Sea views from East Coast and West Coast command a premium of 7.5% and 10.8% respectively. Lake view adds 7.9% to the value and a reservoir view is worth an enhancement of 2.5%. The results demonstrate that waterfront views have substantial economic worth and vary according to type and extent of view. Valuers who lack suitable comparables in making adjustments for waterfront view will find the results useful as an objective reference point to make the appropriate adjustments, depending on extent of view.