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The spillover effects of infill developments on local housing prices

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  • Ooi, Joseph T.L.
  • Le, Thao T.T.

Abstract

This paper examines the spillover effects of infill developments, which involve developing vacant or under-used parcels within existing urban areas that are largely developed, on local housing prices. Employing a difference-in-difference specification on a sample of 275 new developments and 55,887 sale transactions of houses in Singapore, we find that infill developments have a positive and persistent impact on local housing prices. The contagion effect is larger for infill developments that are built on teardown sites. The spillover effect can also be traced to the overpricing of new homes by developers. Overall, the evidence indicates that developers act as price leaders and contribute significantly to price discovery in the local housing market.

Suggested Citation

  • Ooi, Joseph T.L. & Le, Thao T.T., 2013. "The spillover effects of infill developments on local housing prices," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 850-861.
    • Handle: RePEc:eee:regeco:v:43:y:2013:i:6:p:850-861
    DOI: 10.1016/j.regsciurbeco.2013.08.002
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    8. Fan Zhang & Xiuyan Liu & Songlin Li, 2023. "Rebuilding or refurbishing: Heterogeneity effects of urban renewal strategy," Asian Economic Journal, East Asian Economic Association, vol. 37(1), pages 51-81, March.
    9. Carozzi, Felipe, 2020. "The role of demand in land re-development," LSE Research Online Documents on Economics 103690, London School of Economics and Political Science, LSE Library.
    10. Caixia Liu & Xiaolong Liu, 2022. "Adaptive Reuse of Religious Heritage and Its Impact on House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 64(1), pages 71-92, January.
    11. Ooi, Joseph T.L. & Le, Thao T.T. & Lee, Nai-Jia, 2014. "The impact of construction quality on house prices," Journal of Housing Economics, Elsevier, vol. 26(C), pages 126-138.
    12. Brunes, Fredrik & Hermansson, Cecilia & Song, Han-Suck & Wilhelmsson, Mats, 2016. "NIMBYs for the rich and YIMBYs for the poor: Analyzing the property price effects of infill development," Working Paper Series 16/2, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    13. Ahmed Mustafa & Anton Van Rompaey & Mario Cools & Ismaïl Saadi & Jacques Teller, 2018. "Addressing the determinants of built-up expansion and densification processes at the regional scale," Urban Studies, Urban Studies Journal Limited, vol. 55(15), pages 3279-3298, November.
    14. Carozzi, Felipe, 2020. "The role of demand in land re-development," Journal of Urban Economics, Elsevier, vol. 117(C).
    15. Quincy, Sarah, 2022. "Income shocks and housing spillovers: Evidence from the World War I Veterans’ Bonus," Journal of Urban Economics, Elsevier, vol. 132(C).
    16. Bo-sin Tang & Kwan To Wong, 2020. "Assessing externality: Successive event studies on market impacts of new housing development on an old residential neighbourhood," Environment and Planning B, , vol. 47(1), pages 156-173, January.
    17. Idt, Joel & Pellegrino, Margot, 2021. "From the ostensible objectives of public policies to the reality of changes: Local orders of densification in the urban regions of Paris and Rome," Land Use Policy, Elsevier, vol. 107(C).
    18. Nicolás González-Pampillón, 2019. "Spillover effects from new housing supply," CEP Discussion Papers dp1660, Centre for Economic Performance, LSE.
    19. Lan, Hao & Moreira, Fernando & Zhao, Sheng, 2023. "Can a house resale restriction policy curb speculation? Evidence from a quasi-natural experiment in China," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 841-859.
    20. Puustinen, Tuulia & Pennanen, Kyösti & Falkenbach, Heidi & Viitanen, Kauko, 2018. "The distribution of perceived advantages and disadvantages of infill development among owners of a commonhold and its’ implications," Land Use Policy, Elsevier, vol. 75(C), pages 303-313.
    21. González-Pampillón, Nicolás, 2022. "Spillover effects from new housing supply," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    22. González-Pampillón, Nicolás, 2022. "Spillover effects from new housing supply," LSE Research Online Documents on Economics 112932, London School of Economics and Political Science, LSE Library.
    23. Blanco, Hector & Neri, Lorenzo, 2023. "Knocking It Down and Mixing It Up: The Impact of Public Housing Regenerations," IZA Discussion Papers 15855, Institute of Labor Economics (IZA).
    24. Yu, Qing & Hui, Eddie Chi-Man & Shen, Jianfu, 2023. "Do local governments capitalise on the spillover effect in the housing market? Quasi-experimental evidence from house purchase restrictions in China," Land Use Policy, Elsevier, vol. 133(C).

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    More about this item

    Keywords

    Infill developments; Contagion effect; Housing;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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