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Saving the world starts at home

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More should be done to communicate the benefits of eco-friendly housing

It is widely accepted that human consumption has driven environmental damage including climate change.

According to estimates of the UN Environment Programme, as much as one third of total global greenhouse gas emissions come from buildings.

Hence, the development of more environmentally-friendly buildings can make a significant difference to our efforts to limit the impact of climate change.

While most would agree that we should protect the environment, it is far from clear whether people would be willing to pay a premium for eco-friendly products, including housing.

Research from different countries have been mixed.

In Singapore, the Building and Construction Authority (BCA) introduced the Green Mark Scheme in 2005, aimed at encouraging more environmentally-friendly buildings, including a reduction in electricity consumption, an improvement in air quality, and a reduction in environmental damage.

BCA assesses buildings on several criteria for eco-friendliness and gives out Green Mark Awards: Platinum, Gold Plus, Gold and Certified.

That and incentives provided by the Government for eco-friendly buildings may have had an effect.

Such buildings in Singapore have grown exponentially - from 17 in 2006 to 2,003 in 2013 - with a similar increase in gross floor area from 1.1 million to 62 million square metres.

The number of environmentally-friendly housing projects has also grown, though not at the same pace as commercial and industrial buildings - one stumbling block being the reluctance of buyers to pay more upfront for eco-friendly housing.


To examine whether Singaporean buyers are willing to pay a premium for eco-friendly condominiums, I collected data from a government database of about 4,000 buy/sell condominium transactions.

I also surveyed households on their willingness to pay a premium for eco-friendly condominiums, among other factors.

My analysis of transacted prices led me to several conclusions.

There is a premium for eco-friendly condominiums though the extent varies based on factors such as the location of the project and tenure (freehold v 99-year leasehold), among other factors.

My survey results show that at least some consumers seemed willing to pay a premium for eco-friendly condominiums - I did not observe a disconnect between intentions (desire to protect the environment) and action (paying premium prices).

My analysis revealed that the premium does not increase with higher levels of eco-friendliness (eg Gold vs Certified).

Possibly, a lower level of certification is sufficient to make buyers feel good that they are doing their part for the environment, without costing developers (and buyers) too much more.


A majority of respondents did not know whether their current residence enjoyed any level of BCA certification. In fact, many people are unaware of the BCA Green Mark scheme itself.

This suggests that developers should have better communication strategies for their eco-friendly projects, specifically articulating the benefits of these projects in terms of cost savings (like lower water or electricity consumption).

This point was also highlighted in the responses to my survey.

Perhaps developers' efforts are more oriented towards being eligible for government incentives and recognition and not sufficiently towards the buyer.

In my view, the Green Mark scheme is a step in the right direction.

The certification might make buyers more open to paying a premium, in turn starting a virtuous cycle where developers build more eco-friendly condominiums.

As for further steps to enhance the adoption of eco-friendly residential buildings (including condominiums), the Government should continue to enhance the Green Mark Scheme.

More importantly, both the government and developers should make extra efforts to promote the benefits of eco-friendly housing.

It is only when the benefits are communicated that buyers will embrace the concept.

The writer is a graduating senior at the United World College of Southeast Asia. He is interested in sustainability issues and intends to pursue an undergraduate degree in computer science in the US. This article was published in The Business Times yesterday.