Within-development density and housing prices in Singapore

• Main Authors: FESSELMEYER, Eric, LIU, Haoming, POCO, Louisa
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: density; externalities; land-use policy; regulation; Asian Studies; Public Economics; Real Estate
• Online Access: https://ink.library.smu.edu.sg/cis_research/143; https://ink.library.smu.edu.sg/context/cis_research/article/1142/viewcontent/MainDocument___deanonymised.pdf
• Institution: Singapore Management University

This paper measures how much more households pay for less density in their immediate surroundings. Using transaction and administrative data and exploiting the introduction of a regulation that restricted the number of housing units for certain land lots, we find that households discount density: a 10% increase in within-development density decreases the price per square meter by 5%. Further, the mean price per square meter of the average development increased by 1%–3% after the regulation was introduced, while the amount of built-up space remained constant. The increase in total revenue suggests developers may underestimate the externality caused by density.