General Election might be over but the real implication has just begun. Will HDB flats located in opposition-held wards stand to lose? Hypothesis testing between two means at a 95% confidence level shows there is insufficient evidence of price difference for HDB flats between PAP-held and opposition-held wards .
Take Potong Pasir, for example. Housing prices of HDB flats sold in 2010, when the ward was still held by opposition Singapore People’s Party, were found to be comparable. Five-room flats in Potong Pasir averaged $480k then versus $470k for comparable flats in Toa Payoh. Similarly, 4-room flats in Potong Pasir were transacted at an average $400K in comparison to $390K to its comparable counterparts in the rest of Toa Payoh (see Table 1).
Table 1: Average prices of 4- and 5-room HDB flats in Potong Pasir and Toa Payoh in 2010
Underscoring the point, flats located 500m from Hougang MRT Station in the opposition-held Hougang SMC commanded higher premium on average than its equivalent that are situated in Aljunied GRC even back when it was held by the ruling party (see Table 2). In status quo, the outcome of the general election may not have a significant impact on HDB prices in the constituency.
Table 2: Average prices of 4- and 5-room HDB flats 500m from Hougang MRT station in 2009 and 2010
In terms of price upside, the average transacted price for 4- and 5-room flats in the previously opposition-held Aljunied GRC ward surged by 43% and 45% between 2009 and 2013 at the trough and peak of the property cycle, according to our study on a basket of HDB flats located along Ang Mo Kio Avenue 3. Similarly, four and five-room flats along from PAP-held Ang Mo Kio GRC increased comparably in the same period by 39% to 40%. Subsequently, prices for 4-room flats fell 8% for both precincts between 2013 and 2014/2015. Separately, 5-room flats from Aljunied GRC dipped 4% while those from the PAP-held ward declined by 9%. Our study covers flats located along Ang Mo Kio Avenue 3 and are bounded by Yio Chu Kang Road, Serangoon North Avenue 1 and Serangoon North Avenue 5 (see Figure 1).
Table 3: Average price of HDB Flats located along Ang Mo Kio Avenue 3
Figure 1: Areas of comparison between Ang Mo Kio GRC and Aljunied MRT
Prices of HDB flats in Potong Pasir also grew in tandem with the rest of HDB flats in Toa Payoh over a 5-year period from 2007 to 2011 (see Table 4).
Table 4: Average price of HDB flats in Potong Pasir and the other parts of Toa Payoh HDB town