Are property prices reflective of proximity to green spaces?

Is the grass really greener on the other side? Perhaps so in the world of real estate.

HDB flats near greens fetch 3%?

While the resale HDB flat market has settled into a steady course, some units are fetching more than others despite matching in the most frequently-compared aspects.

Prices of HDB flats, or most properties for that matter, are often reflective of their property-age, unit-size, location and proximity to MRT stations, schools, and amenities. But on top of that, being close to areas of greenery could fetch the unit-owner up to 3% more.

A recent study reviewed the resale prices of 15,962 HDB flats sold from April 2013 to April 2014. It found that on average $11,200 of a flat’s price could be attributed to having greenery within a 1.6km radius.

In total, $179 million of all homes sold during the period of a year could be due to their proximity to green spaces.

Related: 3 Amenities that can boost your property’s value

Bishan Park

Managed greens versus natural greens

There is, however, a difference between the perception of managed green spaces such as parks versus natural green spaces such as forests, mangroves or marshes.

Buyers prefer managed green spaces to natural vegetation. Only when the former is not available nearby are the latter selected. However, researchers are lauding the benefits of living near “high conservation value forests” for their lower surface and air temperatures. This could reduce the need for using air-conditioners and thus be better for both the pocket and the ecosystem.

Property analysts, however, do not yet consider this “green factor” a pronounced value-add. The condition of properties is a more likely factor to sway selling prices. The study done was for a period of a year, perhaps when the prices are tracked for a longer duration, more visible differences can be observed.

Whether or not green spaces add to the selling price of a property, the enhancement to living conditions and general well-being can hardly be disputed. HDB works with other agencies to integrate parks and waterways with living environments while implementing “greening solutions” to reduce heat emissions.