Spillover effects of the prime location public housing model on surrounding housing prices in Singapore

Abstract

The Home Ownership for the People Scheme (1964) was introduced to make public housing affordable for Singaporeans (HDB, 2025). However, housing prices have been increasing over the past twenty years, and it was further intensified during the Covid-19 pandemic. One of the more recent policies implemented by the government is the Prime Location Public Housing (PLH) model which aims to make new public flats built in central locations obtainable for all Singaporeans. The first PLH project was launched in Rochor during the November 2021 BTO sales exercise. As it is a new policy, there has been limited existing literature and research done into it. In our research, we seek to contribute to the study of this new policy by providing empirical evidence of possible Spillover Effects of the PLH model on the surrounding public resale housing prices. Using Difference-in-Differences regression models, we find that PLH projects reduce nearby resale prices by 3.95% on average. This suggests that PLH do not just lower housing prices for its own flats but also slight decreases surrounding resale values. Our findings emphasize on the need to keep in mind the unintended spillover effects when designing housing policies as they can either reinforce or undermine policy intentions, especially with the rise in introduction of new housing models and regulations by the government.