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Redevelopment values in multi-family properties: Evidence from en bloc sales in Singapore

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  • Chia, Liu Ee
  • Sing, Tien Foo

Abstract

“Teardown” or redevelopment is an effective policy tool to increase supply elasticity in land-scarce cities. In Singapore, redevelopment of older multi-family properties requires the consent of majority owners to sell their units collectively in a process widely known as “en bloc” sales. Using the resale transaction data in Singapore from 1995 to 2018, we find that private multi-family properties with redevelopment potentials sell at significant premiums of at least 36.7% on average. The resale values of properties with redevelopment potentials increase by 5.5% to 8.3% after the consent of the majority owners to sell the redevelopment rights is obtained. The anticipative effects are observed in resale transactions as early as one year before the en bloc sale events. The price premiums increase from 8.4% to 13.64% when resale transactions occur in 7 to 12 months and within 6 months from the en bloc event. The results are robust and orthogonal to supply constraints in the markets.

Suggested Citation

  • Chia, Liu Ee & Sing, Tien Foo, 2023. "Redevelopment values in multi-family properties: Evidence from en bloc sales in Singapore," Journal of Housing Economics, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:jhouse:v:60:y:2023:i:c:s1051137723000190
    DOI: 10.1016/j.jhe.2023.101932
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    More about this item

    Keywords

    Teardown; Redevelopment options; En bloc sales; Multi-family houses; Anticipative effects;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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