A COMPARATIVE STUDY OF SHOP PRICE INDEXES AND FACTORY PRICE INDEXES

Abstract

Shop and factory spaces are two different types of properties with different inherent characteristics. This thesis marks an attempt in comparing the market performances of shop and office spaces. The main indicator of property market performance is determined by the property price indexes. The most established and widely used index in Singapore is the URA price indexes. However, quality change is not accounted for under the indexes. Hence, shop and factory hedonic indexes, which take into account quality changes over time and spaces, are constructed on quarterly basis. The hedonic indexes constructed in this thesis are expected to be a better indicator of market performance analysis. Besides the comparison of market performance between shop and factory spaces, the hedonic analyses also discovered the similarities and differences of shop and factory price determinants. At the same time, the hedonic indexes are used for comparison against URA indexes. Upon examination, it was discovered that both the URA and hedonic indexes were relatively similar in trend and price movements. However, differences in the price movement still exist during certain years. URA indexes are found to be more volatile than hedonic indexes and factory index is discovered to be more volatile than shop index. Due to the advancement of telecommunications and technology, which has linked countries to one another, the world has become a global village. Any event happening in one part of the global village will affect one another; this event is referred to as macro event. Six macro events were identified to test against the estimated hedonic indexes. The results show that all the events had no impact on prices due to the scope and nature of the events. In addition, the findings are subjected to certain limitations.