The Online Citizen A Community of Singaporeans Tan Lay Kuan
Intrigued by MM Lee’s claims that housing prices would collapse if the citizens choose the opposition members as their MPs, we have conducted a little study to validate this “hard truth”.
For this study, we have chosen to zoom in on an interesting section of Toa Payoh Lorong 8 where a cluster of 4-room HDB flats with the same floor area (82 sqm) are completed between 1975 and 1978.
The reason for this choice is that the cluster of similar flats are split between Bishan-Toa Payoh GRC (Blk 226 and 227) and Potong Pasir SMC (Blk 214, 219, 220, 221 and 222).
Hence, the specifications (i.e. location, design, floor area, age) of this cluster are the same, with the only exception being that some of them are in opposition ward while others are in government hands. Comparing their resale prices would allow us to validate MM Lee’s statement. In addition, the blocks in Bishan-Toa Payoh GRC had been upgraded while those in Potong Pasir SMC had not undergone any significant makeover.
Methodology:
Analysis of a similar cluster of 4-room (82 sqm) HDB flats along Toa Payoh Lorong 8, completed between 1975 and 1978.
· Bishan-Toa Payoh GRC (Blk 226 and 227)
· Potong Pasir SMC (Blk 214, 219, 220, 221 and 222)
Data:
Resale Price of Flats between May 2010 and April 2011, taken from HDB Infoweb.
The resale price and unit data (see Attachment 1), taken from the HDB Infoweb, are analysed as shown in Attachment 2. Unfortunately, the data points for the Bishan-Toa Payoh GRC flats are probably insufficient to provide conclusive evidence. However, a simple analysis of the average selling price indicates that the flats in Potong Pasir SMC seem to be more expensive than those in Bishan-Toa Payoh GRC. The main reason could be that most of the sales are on higher floors in Potong Pasir SMC. Hence, we further analysed the average selling price based on the level of those units. The flats are found to be more expensive for Potong Pasir SMC for those units between 1 to 10-storey.
However, for those above 10-storey, the average resale price is higher in Bishan-Toa Payoh GRC. The difference of $11,000 though, is not a lot when compared to other probable variables such as the level of the unit (see highlighted resale values of 2 separate Blk 219 units on different levels in Dec 2010 where there is a difference of $40,000) and the upkeep/interior design of the unit (see the $32,000 difference between 2 separate Blk 220 units on same level in Oct 2010).
Summary of the Average Resale Prices between May 2010 to April 2011
Bishan-Toa Payoh GRC (Blk 226 and 227)
Average Price (All) = $ 345,745.43
Average Price (1 to 5 storey) = $ 332,500.00
Average Price (6 to 10 storey) = $ 341,072.67
Average Price (11 to 15 storey) = $ 366,000.00
Potong Pasir SMC (Blk 214, 219, 220, 221 and 222)
Average Price (All) = $ 351,300.00
Average Price (1 to 5 storey) = $ 334,142.86
Average Price (6 to 10 storey) = $ 350,800.00
Average Price (11 to 15 storey) = $ 355,000.0o
In conclusion, we cannot find evidence of MM’s claims in our study that the HDB resale prices would collapse if a constituency goes over to the opposition or that there is a significant difference between the property values of HDB flats on government and opposition wards, holding other variables (i.e. location, design, floor area, age, level of unit) constant.