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The role of speculation on housing price disparities

Author

Listed:
  • Huang, Naqun
  • Li, Hao
  • Yang, Yanmin

Abstract

This paper explores the impact of speculation on disparities in home purchase prices within neighborhoods. Using administrative data on residential real estate transactions in Singapore's private housing market, our analysis reveals that housing unit prices increase over time within a neighborhood in the presence of speculators. However, this pattern remains stable after the implementation of macroprudential policies aimed at deterring speculation. Our mechanism analysis indicates that while speculative sales contribute to the increase in the price of neighboring units over time, speculative purchases have negligible effects. These findings underscore the potential of macroprudential policies in mitigating speculation and promoting housing affordability.

Suggested Citation

  • Huang, Naqun & Li, Hao & Yang, Yanmin, 2024. "The role of speculation on housing price disparities," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    • Handle: RePEc:eee:reveco:v:96:y:2024:i:pa:s1059056024006142
    DOI: 10.1016/j.iref.2024.103622
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    More about this item

    Keywords

    Housing prices; Neighborhood; Sales sequence; Speculator; Property under construction;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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