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Research Seminars & Workshops @ IRES


Associate Professor Joseph Ooi
Department of Real Estate, NUS

Construction Quality of New Housing and House Prices


Date:

28 November 2012, Wednesday

Time:

4.00pm - 5.30pm

Venue:

ER1 SDE 2 Level 3


Abstract

This paper examines the impact of workmanship and construction quality of new housing on their sale price and capital growth. To measure construction quality, we take advantage of a unique situation in Singapore where all newly completed residential projects are assessed independently on their workmanship under the Construction Quality Assessment System (CONQUAS). Examining 100,593 sale transactions of apartment units in Singapore between 1998 and 2010, we find strong evidence that their selling price and appreciation rate are related significantly to construction quality of the new homes. Moreover, the "quality" premium is present in both the primary and secondary markets. The empirical evidence appears to suggest that apartments that are well constructed do not only command a higher price for developers, but they also generated higher capital growth for homeowners and investors.

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