IMPACT OF NORTH EAST MRT LINE ON RESALE PRICE OFHDB FLATS

Abstract

Real estates are unique from other products, two main reasons being that they are heterogeneous and immobile, thus the location of a property is an important housing determinant. With the extensive development of the Mass Rapid Transit System in Singapore, it is reported that there is an increase in its ridership as compared to other public transports. Hence this paper aims to examine the impact of the North East MRT line on the resale price of HDB flats. The main advantage of resale flats is that buyers are able to choose their preferred location. The analysis of this study will focus on three selected estates, namely, Serangoon, Hougang and Sengkang. There are two specification models that comprises of a basic model which excludes all interactions and the other model with interaction terms. For the three basic models, the proximity to MRT stations are computed to have positive impacts to resale price of HDB flats but they are only statistically significant in Serangoon and Sengkang models. While there are variations in the sign for MRT interaction variables except for the interaction term with school that gives a steady negative sign in all the three models. In conclusion proximity to MRT station does contribute to the resale price of HDB flat when holding other variables constant. However when MRT interacts with different variables, it will give a different sign in view of the distinct features in each estate.