MKT202 | Marketing Management | Impact of Integrated Shopping Mall

Main bulk of the write up should focus on the impact of such integrated malls on the non-landed private properties (condominiums).

1) A comparison of such integrated shopping malls (With the residences) Needs to be compared with other non-landed private properties across the 4 region, North, South, East and west. Compare by per psf for the various type of bedrooms of the residences.

2) Have to acknowledge that there may be other factor such as availability of MRT station nearby that may affect the price too but for this essay, we'll not consider it. (Refer to this link to establish the point that MRT not necessarily increase the price of the private properties.

Answer:

Introduction

Over the last one decade scholars and economists have developed a substantial amount of study on different elements manipulating the private residential properties value. Key property value determinants include physical features amenity, property, and environmental attributes, financial sale conditions and most essentially, property location. Buyers of homes look at various property facets when deciding on the price they will be comfortable paying for the homes. Such facets include number of bedrooms, property’s square footage, number of bathrooms, and size of the lot. Nevertheless, as many say, there are only three things that matter in the entire industry. That is location, location, and location. Hence this essay focuses on how private property prices are affected by being located next to or above integrated shopping malls in Singapore.

Price Effects on Private Property Due to Integrated Shopping Malls

Since Singapore is city state there is no much pretty of land that is left unused. Therefore many people are developing on non-landed private properties (Bay, 2014). Apartments and Condominiums are built on top and below of each other. The owners of all the units share the whole compound and hold a strata title. This article focuses on some of the price impacts brought up by non-landed private properties developments.

The price of private non landed homes were high but eventually dropped after the property cooling measures took place .Resale prices of condominiums and private apartments declined by 0.2 per cent (from SRX property portal) (Sing, Tsai, & Chen, 2016). Developers were expecting the sale price of non landed private properties to continue going higher even though at a slower pace after higher additional buyer’s stamp duty (ABSD) rates and tighter loan-to-value limits took place. After the property curb took place also, it brought a big drop in resale of private non landed homes that fell to 35.3 per cent. On year to year basis prices went down. In her comments regarding the data, Christine Sun, the Orange Tee & Tie research and consultancy head stated that: "These down trends might be an early signal that resale prices might have peaked in a number of residential divisions and are beginning to unstiffen under the present cooling regulations” . The drop was felt most by apartments in the in the central city where homes are more likely to be bought for investment or speculative purposes and on which the higher ABSD rates and loan limits are likely to apply. 

Contrary the prices for units outside central city are more likely to be bought by homebuyers continue to rise by 0.8 percent. (Yuen, KWEE, & Tu, 2016). The premium buyers were prepared to pay over market value continued to decline as per SRX measure. Overall median transaction over X-value (TOX) fell to zero after falling to $4,000 from $17,000 before the latest cooling measures. TOX measures how much a buyer is overpaying or underpaying on a property. Many people sold below the valuation because they recorded either zero or negative median TOX. Ms Sun stated that "many signpost that the winds have moved from a seller's to a buyer's market."

Prices of private properties near the MRT are of the same as the rest of the country or slightly at a low percentage higher indicating a slow growth (Deng, McMillen, & Sing, 2012). Condos located less than one kilometer away from the MRT station five years prior to opening there is -5.9 percentage fall (from table 2) and to make the matter worse the price per square feet of condos less than a kilometer its dropping in second and first year prior to the opening of the MRT and the people knew that the MRT are opening in less period of time thereby indicating that availability of MRT station nearby may not affect the price of private properties.

Prior to opening condos located between one to two kilometers away from the MRT station have a slighter increase of 5.5 percentage in price less than those near the MRT station. Those situated one kilometer less than MRT should have more growth price because people would prefer to live near MRT station so as to avoid lateness and other inconveniences that may be brought up by living far away from the MRT station. After the opening of the MRT station, condos that are near the station have a decrease of prices compared to those that are one to two kilometers away from the stations (Sing, 2011). Those that are near the station should cost higher because people would prefer to live near the stations a clear indication that availability of MRT station nearby may not affect the price of private properties.

The presence of the MRT stations in the areas  that were already well served by public transport prior to the opening cannot have much effects because people are already connected and catered by the transport system that were there prior. (Chin & Foong, 2016).  The presence of MRT station will not see many people relocating near it hence no change in the price of private properties. The presence of the MRT stations in the areas that have less or no development like enough social amenities developer would not build much combos hence many people would no relocate making no much changes in prices of private properties

Conclusion

  Over the last three years the price of non-landed private properties prices were high. This was due to the integrated shopping mall but after the financial regulations like the additional buyer stamp duty the prices dropped. The dropdown was mainly in areas where homes are more likely to be bought. The prices for units outside central city or areas far away from the MRT stations are more likely to be bought. Therefore, this is a clear indicator that the presence of condominium and stations may not determine the price of private properties. There are many environmental factors like location, social necessities and population that contributes largely in determining the prices of the non-landed private properties than the presence of MRT stations and integrated shopping mall in the four regions of Singapore.

References

Bay, J. H. (2014). Sustainable community and environment in tropical Singapore high-rise housing: the case of Bedok Court condominium. arq: Architectural Research Quarterly, 8(3-4), 333-343.

Chin, H. C., & Foong, K. W. (2016). Influence of school accessibility on housing values. Journal of urban planning and development, 132(3), 120-129.

Deng, Y., McMillen, D. P., & Sing, T. F. (2012). Private residential price indices in Singapore: a matching approach. Regional Science and Urban Economics, 42(3), 485-494.

Deng, Y., Li, Z., & Quigley, J. M. (2012). Economic returns to energy-efficient investments in the housing market: evidence from Singapore. Regional Science and Urban Economics, 42(3), 506-515.

Sing, T. F., Tsai, I. C., & Chen, M. C. (2016). Price dynamics in public and private housing markets in Singapore. Journal of Housing Economics, 15(4), 305-320.

Sim, L. L., Malone-Lee, L. C., & Chin, K. H. L. (2011). Integrating land use and transport planning to reduce work-related travel:: a case study of Tampines Regional Centre in Singapore. Habitat International, 25(3), 399-414.

Sing, T. F. (2011). Dynamics of the condominium market in Singapore. International Real Estate Review, 4(1), 135-158.

Yuen, B., KWEE, L. K., & Tu, Y. (2016). Housing affordability in Singapore: can we move from public to private housing?. Urban Policy and Research, 24(2), 253-270.