Do cemeteries impact prices of nearby properties?
By Feily Sofian,
Esther Hoon
/ The Edge Property |
The award of a plot of land in Sengkang to Eternal Pure Land, which planned to develop it into a commercial columbarium, drew the ire of prospective residents at a nearby HDB project. The government subsequently withdrew the award and called for a fresh tender for the building of a Chinese temple. On Oct 27, Thye Hua Kwan Moral Society was awarded the 21,500 sq ft site with its top bid of $6 million.
Do cemeteries and columbariums lower nearby property values? An analysis of historical transactions for HDB flats near Yin Foh Kuan Cemetery and Bright Hill columbarium and crematorium suggests they do.
Yin Foh Kuan Cemetery at Holland Close
HDB flats at 5, 6 and 32 Holland Close and 7 and 7A Commonwealth Avenue, which are fronted by Yin Foh Kuan Cemetery, were transacted at lower prices compared with similar properties in the vicinity. Since 2002, four-room HDB flats in blocks facing the cemetery have been 2.3% cheaper on average than those farther away. The price gap was larger for five-room flats, at 5.5% cheaper.
In 2014, a four-room flat on a high floor was sold at $700,000 while a similar unit farther away went for $735,000. Year to date, the average price for four-room flats on low floors was $648,000 in blocks fronted by the cemetery and $670,000 in blocks that do not.
There were no transactions involving five-room flats fronted by the cemetery in 2014 and 2015. In 2012, a low-floor unit fronting the cemetery changed hands at $770,000 while a similar unit farther away fetched more than $800,000.
Bright Hill columbarium and crematorium
HDB blocks 404, 405 and 408 Sin Ming Avenue in Bishan face the Bright Hill columbarium and crematorium, although they are not directly fronted by it. All the transactions in the three blocks involved five-room and executive flats. Based on historical transactions from 2002 to date, five-room flats in these blocks were 4.4% cheaper on average than those in nearby blocks that do not face Bright Hill.
In 2014, five-room flats on low floors were sold at an average price of $590,000, lower than the $608,000 seen for a similar unit farther away. This year, a mid-floor unit facing the columbarium went for $642,000 while a similar unit farther away fetched $690,000.
Due to limited data, we are unable to test the price difference at statistically significant levels. Our exercise used the stratified sampling method based on HDB resale prices from 2002 until today. Each comparison point was made between HDB flats of similar sizes and floor levels and sold in the same year, resulting in limited data within each criterion.
Proximity to cemeteries may increase property prices
Interestingly, under special circumstances, proximity to cemeteries may bump up property prices. A study by James E Larsen and Joseph W Coleman shows that houses with a view of the Bellbrook Cemetery in Ohio, the US, commanded an 8.8% premium compared with those that do not face the cemetery.
The cemetery is said to be well-maintained and homebuyers in the area value it as a park where residents can exercise or simply enjoy the green spaces. According to the study, planning authorities are usually reluctant to disturb land used as a cemetery, particularly in rural areas. Residents can therefore be assured that the positive attributes associated with a well-maintained cemetery would remain.
On the other hand, cemeteries that are not as well-maintained result in negative externalities. The same study found that houses with a view of the Xenia Cemetery, also in Ohio, were transacted at a 10.1% discount compared with those that do not face the cemetery.
Superstition aside, proximity to cemeteries increases the risk of toxic chemicals and materials contaminating the soil and ground water, the report said, quoting Alison L Spongberg and Paul M Becks in their article, “Inorganic Soil Contamination from Cemetery Leachate”. These include formaldehyde used in embalming as well as varnishes and preservatives used in coffins. Psychologically, nearby residents may also be negatively impacted by the sight of funeral services.
Final words
In Singapore’s context, there is evidence of a price discount for HDB flats facing a cemetery or a columbarium. However, the finding is confined to Yin Foh Kuan Cemetery and Bright Hill columbarium and crematorium localities, which offer neither a park view nor benefits.
A quick survey among experienced valuers points to price differences between flats with views of a cemetery or a columbarium and those without. However, the difference is small as home seekers who shortlist these properties for viewing obviously do not mind the proximity. On the other hand, these properties could take a longer time to market and prospective buyers could use this factor as a bargaining chip.
Lastly, prospective buyers gunning for build-to-order flats facing the Bidadari Park should not be too concerned about its history as a cemetery. Based on the findings by Larsen and Coleman, the positive attributes associated with a well-maintained park, despite its rather grim history, would mitigate the superstitious mindset prevalent among Asians.
This article appeared in The Edge Property Pullout, Issue 701 (November 2, 2015) of The Edge Singapore.
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