ISSS608 2016-17 T1 Assign1 Lee Gwo Mey
Contents
Abstract
The Proximity Housing Grant was introduced in August 2015 to encourage Singaporeans to buy resale flat with or near their parents or married children. Data on resale flat prices were obtained for the period from January 2015 to June 2016 to review if the new grant measure is effective in encouraging purchase of HDB flats through the resale market. Results of this review showed it is likely that the new measure has encouraged more Singaporeans to purchase larger units of resale flats (4-room & 5-room) which is suitable for extended families to live together; thus meeting the grant objective of allowing Singaporeans to stay with or near their parents or married children. However, the results did not reveal any significant impact to the resale flat prices.
Problem & Motivation
To maintain strong network of family support and relationship, many Singaporeans wish to stay near their parents or married children. This is especially true for married working adults with young children where the kids’ grandparents are their primary caregivers during the day. Most couples will send their children to the parents’ house before going to work and pick them up after work. This daily routine will be made more convenient if they were to stay near their parents’ house.
To help Singaporeans achieve this desire, the Housing & Development Board (HDB) had, with effect from 24 August 2015, announced a $20k Proximity Housing Grant for Singaporeans to buy a resale flat with or near their parents or married children.
The objective of this review is to determine whether this new grant measure is effective in encouraging more Singaporeans to purchase flats through the resale market.
Approaches
The methodology adopted is to review the HDB resale flat data to determine whether there is any impact to the number and resale prices of these flats before and after the implementation of the Proximity Housing Grant scheme.
The scope of review is restricted to the following data files obtained from the national data portal of Singapore (Data.gov.sg) for the review period from 1 January 2015 to 30 June 2016:
- Resident Household by Type of Dwellings – Annual (Jan’15 to Dec’15)
- Resale Flat Prices (based on Registration Date) (Jan’15 to Jun’16)
The following preliminary data preparation and cleansing was performed on the source data obtained:
Review appropriateness of data fields format
Resale Date – The date field format was changed from “YYYY-MM” (e.g. 2015-01) to “DD-MM-YYYY” (e.g. 01-01-2015) to enable reporting of results by year and quarters.
Perform further categorisation or grouping of detailed data fields
Flat types – The 7 flat types were re-grouped into 5 main flat types for easier comparison as the quantity under 1-Room, 2-Room, Executive and Multi-Generation flat types were small.
| Original Flat Types | Revised Flat Types |
|---|---|
| 1-room, 2-room | 1 & 2-room |
| 3-room | 3-room |
| 4-room | 4-room |
| 5-room, Executive, Multi-Generation | 5-room & Executive |
Town Areas – A new data field “Region” was created to map the 26 town areas into 5 main regions (Central, East, North, North-East, West). This is to enable presentation of graphs by broad categories instead of cluttering with a long list of town area. Information to map the town areas to regions was obtained from the Wikipedia on Urban Redevelopment Authority, Planning Areas of Singapore.
Compute required calculations on the following fields
Age of Flat – The source data provided the lease commencement year of each resale flat transaction. A computed field (resale year minus lease commencement year) was created to calculate the age of the flat as at time of resale. However, the computed result showed a long list of age values ranging from 3 to 49 years. Hence, the age of flat details was further summarised into 5 main age category (1-10, 11-20, 21-30, 31-40 and 41-50).
Unit Price Per Square Meter (Sqm) – The source data provided only the absolute resale price value for each resale flat transaction. As the size of each resale flat varies from 31 sqm to 199 sqm, a computed field (resale price divided by floor area) was created to arrive at the unit price per sqm to comparative purposes across all flat types.
Tools Utilized
- Microsoft Excel – for data preparation and cleansing
- Tableau – for data analysis and reporting
Results
Observation 1:
The total number of resale flats in 2015 was 27,447 units, a mere 3% of the total HDB flats.
The pie chart was used to illustrate that the proportion of resale flat constitute a “very small slice in the pie” on the total HDB public housing supply in 2015.
Observation 2:
There is an increasing trend in the number of resale flats from 2015 to 2016, a likely indication that the new scheme has encouraged more purchase of resale flats. Comparing the same quarters 1 & 2 for year 2015 & 2016, there was an increase of 12% of resale flats sold. By types of flat, there was an increase on demand for 4-room and 5-room flats, with 2016 Q1 showing the highest number of 4-room flats (2,343 units) and 5-room flats (1,720 units) sold so far.
Observation 3:
The average age of resale flat is 25 years and the majority are less than 40 years. Assuming a typical HDB flat lease period of 99 years, the age of resale flat is relatively “young”. This is also in line with the expectation as there are policy restrictions imposed on the selling HDB flat below 5 years and housing loan restrictions for resale flats above 60 years.
The bar chart was used to show the total number of units sold in each quarter for 2015 & 2016. The different colours within the bar differentiate the types of flat and the age of flat respectively.
Observation 4:
The top 3 locations where resale flats were sold in 2015 & 2016 are in the town areas of Jurong West, Tampines and Woodlands. The number of resale flats in these 3 towns constitute 22% of total resale flats sold. Further analysis revealed that 80% of the resale flats in these 3 towns belong to larger flat types (i.e. 4-room & 5-room flat). It is likely that larger resale flats were purchased for extended families to stay together, which is the intent of this new scheme.
The pareto diagram was used to show the top town areas for resale flats and the horizontal bar chart showed the flat types within each town area.
What are the distribution of the resale public housing prices in 2015 & 2016?
Observation 5:
The HDB does not regulate resale flat prices. Each sale transaction is the result of price negotiation between the buyer and seller. This explains why there are huge variance in resale prices, with the highest at $10,645 per sqm and lowest at $2,687 per sqm in 2015.
Observation 6:
Resale flats in the central region are significantly more expensive that flats in other regions. The median unit price per sqm in the central region is $5,595 (2015) and $5,676 (2016), way above the median unit price per sqm for other regions which is around $3,786 to $4,658.
Observation 7:
It is interesting to note that the unit price per sqm for smaller units (1 & 2 room) is higher that the bigger units. One possible explanation could be that these smaller units are located in the central region such as Bukit Merah, Geylang, Queenstown, etc which fetches a much higher resale price (see Figure 5).
Observation 8:
From the distribution of unit price per sqm for 2015 & 2016 (see Figure 6 & 7), there is no huge increase/decrease in the resale prices, hence no evidence that the new scheme has affected the resale price value.
The boxplot was used to show the median and variance outside the upper and lower quartile for the unit price per sqm, by location and by flat type to discover unusual price distribution.
Conclusion
Based on the above analysis, it is likely that the Proximity Housing Grant scheme has encouraged more Singaporeans to purchase larger units of resale flats (4-room & 5-room) which is suitable for extended families to live together; thus meeting the grant objective of allowing Singaporeans to stay with or near their parents or married children. However, the results did not reveal any significant impact to the resale flat prices.
References:
[1] www.hdb.gov.sg – HDB website on Proximity Housing Grant Policy
[2] www.data.gov.sg – Data files relating to HDB Resale Flat Price
[3] Wikipedia on Urban Redevelopment Authority, Planning Areas of Singapore
