Hdb Ppt

HDB Resale Prices:

A DIY Valuation Guide

Record HDB prices

THE MORE WE KNOW, THE BETTER 'Consumers will increasingly want such fine-tuned data

and transparency will become more crucial in the market.' PROPNEX CHIEF EXECUTIVE MOHAMED ISMAIL

HDB Valuation Guide

Problem• HDB prices risen to record levels last year• Rising resale HDB prices worries

Singaporeans• HDB releases complex transacted data on

the website to create a informed market• For the average S’porean, how to value

HDB resale flats?• Our objective is to provide an intuitive model

to accurately estimate HDB prices

HDB Valuation Guide

6 Factors affecting HDB prices

• Floor area (sqm)

• Estate/District (eg. North/ Toa Payoh)

• Floor level (1st-5th floor etc)

• Age

• Distance to MRT

• Type (3 room/4 room/ 5 room etc.)

HDB Valuation Guide

Data collection• Source

– http://www.hdb.gov.sg (median prices)

• Data – 3 months data of flats sold in 4 representative area – North, Toa Payoh– East, Bedok– West, Clementi– Central, Bukit Merah

• Additional parameter – Distance to MRT obtained from streetdirectory.com

HDB Valuation Guide

Pivot Table SummaryCount of Resale Price Flat Type

Region 1 room 2 room 3 room 4 room 5 room Executive

Central 1 5 74 53 30

East 9 105 87 39 16

North 6 77 41 16 5

West 66 23 17 6

Average of Resale Price Flat Type

Region 1 room 2 room 3 room 4 room 5 room Executive

Central 146000 182000 280470 440068 570790

East 179778 226479 312402 426474 488306

North 168333 247330 389856 511063 601560

West 258300 368813 502235 602500

HDB Valuation Guide

Regression validityScatterplot of Fit vs Resale Price

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Fit StatTools Trial Version

For Evaluation Purposes Only

StatTools Trial VersionFor Evaluation Purposes Only









Scatterplot of Residual vs Fit

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Fit

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MultipleR-Square

Adjusted StErr of

Summary R R-Square Estimate

0.9598 0.9213 0.9190 34209

Degrees of Sum of Mean of

F-Ratiop-

ValueANOVA Table Freedom Squares Squares

Explained 19 8.99E+12 4.73E+11 404.0000<

0.0001

Unexplained 656 7.68E+11 1.17E+09

HDB Valuation Guide

Regression Results

HDB Valuation Guide

CoefficientStandard

t-Value p-ValueRegression Table Error

Constant 167660.9165 14686.32878 11.4161 < 0.0001

Floor Area 3569.150214 139.2553075 25.6303 < 0.0001

MRT distance -42984.4778 4190.737523 -10.2570 < 0.0001

Flat Age -2682.913129 208.3776486 -12.8752 < 0.0001

Region = North 32906.6484 14461.9506 2.2754 0.0232

Storey = 06 to 10 14994.00035 3122.436104 4.8020 < 0.0001

Storey = 11 to 15 22862.68969 3736.554967 6.1187 < 0.0001

Storey = 16 to 20 53142.22696 7108.729417 7.4756 < 0.0001

Storey = 21 to 25 75246.82328 8546.140409 8.8048 < 0.0001

Storey = 26 to 30 90021.70507 18220.68458 4.9406 < 0.0001

Storey = 31 to 35 117363.6388 34921.75275 3.3608 0.0008

Flat Type = 3 room -22722.91825 4059.153597 -5.5979 < 0.0001

Flat Type = 5 room 29469.49606 6158.543014 4.7851 < 0.0001

Flat Type = Executive 56082.93753 10104.65847 5.5502 < 0.0001

Interaction(Floor Area,Region = East = 1) -1222.252294 75.87903886 -16.1079 < 0.0001

Interaction(Floor Area,Region = North = 1) -786.7754582 154.9356335 -5.0781 < 0.0001

Interaction(Flat Age,Region = East = 1) 963.9129656 249.8308328 3.8583 0.0001

Interaction(Flat Age,Region = West = 1) -611.7219253 287.7137091 -2.1261 0.0339

Interaction(MRT distance,Region = North = 1) -25328.90773 9023.763653 -2.8069 0.0052

Interaction(MRT distance,Region = West = 1) -36269.57061 9083.679846 -3.9928 < 0.0001

Findings• Top 3 Most Important Factors:

– Floor Area– Flat Age– MRT distance

• Region, Floor level and Type:

- relatively less importance

HDB Valuation Guide

Interpretation Price Change

Increase of 1sqm Increases by $3569

Increase of 1 year Decreases by $2682

Increase of 1km Decreases by $42984

• Tested for interaction between 3 most important factors

• Results show marginal effect due to interaction• Noticeable interpretation:

– For flats in the East and North, larger floor area results in lower prices

– For flats in the West, older flats have bigger price drop

– For flats in the West, those further from MRT have bigger price drops

Interaction of Key Factors

HDB Valuation Guide

DIY Model

HDB Valuation Guide

HDB Price = 167660 + 3569 Floor Area - 42984 MRT – 2682 Flat Age

+ 32906 North + 14994 Story 6to10 + 29468 5-room

Factors Price

167660

Floor area = 100sqm 356900

MRT distance = 1km 42984

Flat age = 10 years 26820

Region = North 32906

Floor Level = 6 to 10 14994

Type = 5 room 29468

Total $532, 124

Limitations

HDB Valuation Guide

• There should be trade-off among several additional factors which might have influenced the results such as hawker centre, market place, hospital, etc

• The model was built using a sample of chosen HDB location

Conclusion

HDB Valuation Guide

• HDB is bought for convenience regardless of the location.

• The higher the HDB, the more expensive it will be

Business

Hdb Ppt