It's official: Conservation has positive impact on property value in Singapore

As if there wasn’t already enough reason to set up home in neighbourhoods such as Bugis, Katong and Tiong Bahru, up pops a study showing that the conservation of historic buildings in Singapore may give surrounding property values a boost.

The study, conducted by Assistant Professor of Law Edward Ti from the Singapore Management University and urban planner and senior tutor at the Lee Kuan Yew School of Public Policy Tan Bin Shin, is titled "What is the value of built heritage conservation? Assessing spillover effects of conserving historic sites in Singapore". Published in November 2019 on ScienceDirect, the study examined over one million residential resale transactions between 1997 and 2017.

According to the Urban Redevelopment Authority’s (URA) website, over 7,000 buildings in Singapore have been conserved (i.e. gazetted for conservation) since the city-state’s conservation programme started in the 1970s.

The biggest finding of the study is how the increase in property value was most significant when the home is located between 800 metres and 1.6 kilometres from the conserved property. Further than that, and the researchers found that the positive effect dissipated.

In one zone with more than 3,200 postal codes within the central part of Singapore, private homes within 800m to 1.2km from the conserved property witnessed a hike of around $480 per square metre (psm), or about $45 per square foot (psf) in their sale price during the year the property is gazetted, and an additional $378 psm ($35 psf) three years after.

"Our analysis suggests a positive and significant relationship between conserving property and an increase in value for neighbouring properties,” Prof Edward Ti told Today Online. He added that the study’s findings "confirmed [their] initial hypothesis that conservation buildings are indeed valuable amenities in Singapore.”

HDB flats, however, experienced no significant effect from conservation. Resale prices of flats in the vicinity of a conserved property increased by $83 psm ($7.70 psf) during the same year that the conserved property was gazetted. The researchers noted no significant increase in value three years after.

In our Property Market Outlook 2020, we highlighted that the new decade will be an exciting one for city fringe residential property. City fringe residential properties refer to homes within the Rest of Central Region (RCR).

Conservation is usually part of a larger urban renewal intiative, which seeks to raise liveability standards in existing populated areas. Conserved properties are also subsequently put to high-value use, such as entertainment venues and boutique offices. These are considered valuable amenities that draw residents to the area.

It is this confluence of demand that could be what links conservation of historical buildings to an increase an surrounding property value.

In the course of the past decade, overall median psf transaction prices of non-landed private properties in the RCR have increased 42% from S$1,035 psf in Q1 2010 to S$1,802 psf in Q3 2019. “With the pace of rejuvenation of the built environment, there is likely further room for property value to increase in the RCR,” said Tan Tee Khoon, Country Manager-Singapore at PropertyGuru.

“The addition of new homes and amenities will create a virtuous cycle of rising value," he added.

Did you know there are condos in Singapore that incorporate conserved buildings as part of the project? Here’s a list you can check out: