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Aging like fine wine: a Singapore public housing story

Author

Listed:
  • Li Bingqiao

    (Singapore Institute of Technology)

  • Fei Gao

    (Singapore Institute of Technology)

  • Seck Tan

    (Singapore Institute of Technology)

Abstract

This paper examines the unique context of the public housing resale market in Singapore over a 29-year period (1990 to 2018). We find that, on average, there is a price premium for housing units with a longer-term lease. This premium effect is significant and nonlinear after controlling for size, floor level, macroeconomic conditions, as well as year and location fixed effects. Specifically, the town and street fixed effects address the concern that older (but established) districts are characterized by more reputable schools and infrastructure such as health care offerings and shopping malls, while developing districts have innovative facilities with a fresh contemporary outlook as that of modern satellite towns. We document a different lease premium in mature towns as compared to that of the new towns, which captures the different concerns of buyers in combination with location and other characteristics of the houses.

Suggested Citation

  • Li Bingqiao & Fei Gao & Seck Tan, 2023. "Aging like fine wine: a Singapore public housing story," International Real Estate Review, Global Social Science Institute, vol. 26(1), pages 95-126.
    • Handle: RePEc:ire:issued:v:26:n:01:2023:p:95-126
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    References listed on IDEAS

    as
    1. Yong Tu, 1999. "Public Homeownership, Housing Finance and Socioeconomic Development in Singapore," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 11(2), pages 100-113, July.
    2. Beng Huat Chua, 2015. "Financialising public housing as an asset for retirement in Singapore," International Journal of Housing Policy, Taylor & Francis Journals, vol. 15(1), pages 27-42, January.
    3. Wong, Maisy, 2014. "Estimating the distortionary effects of ethnic quotas in Singapore using housing transactions," Journal of Public Economics, Elsevier, vol. 115(C), pages 131-145.
    4. Beng Huat Chua, 2015. "Financialising public housing as an asset for retirement in Singapore," European Journal of Housing Policy, Taylor and Francis Journals, vol. 15(1), pages 27-42, January.
    5. Edelstein, Robert H. & Lum, Sau Kim, 2004. "House prices, wealth effects, and the Singapore macroeconomy," Journal of Housing Economics, Elsevier, vol. 13(4), pages 342-367, December.
    6. Randolph, William C., 1988. "Estimation of housing depreciation: Short-term quality change and long-term vintage effects," Journal of Urban Economics, Elsevier, vol. 23(2), pages 162-178, March.
    7. Li-Min Hsueh, 2000. "The Relationship between Housing Price, Tenure Choice and Saving Behavior in Taiwan," International Real Estate Review, Global Social Science Institute, vol. 3(1), pages 11-33.
    8. Yong Tu, 2003. "The Macro Impacts of Public Resold Dwellings on Private Housing Prices in Singapore," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 15(3), pages 191-207, November.
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