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Dynamics of the Condominium Market in Singapore

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Abstract

This study examines economic and market factors that drive the demand, supply, and pricing of condominiums in Singapore using a 2-stage least squares regression methodology. This empirical study covers a sample period of 12 years from 1988 to 2000. The condominium housing demand model showed that GDP growth and the inflation rate had positive relationships with condominium demand one quarter ahead. However, demand for condominiums was negatively related to one-quarter lagged stock price change, two-quarter lagged condominium housing price change, lagged demand in the previous two quarters, and one-quarter lagged household formation. On the supply side, changes in last-quarter condominium housing stock, condominium commencement, the prime lending rate, and current and lagged-quarter labor costs would adversely affect developers?decisions to commence new condominium projects. In the condominium price model, the dummy variable used to test the effects of the government’s anti-speculation policies in May 1996, which increased the supply of residential lands and restricted the loan quantum to a limit of 80% of the housing price, was significant and positive. It implied that the policies were effective in dampening condominium prices by 0.32% per quarter for two consecutive quarters in 4Q1996 and 1Q1997.

Suggested Citation

  • Sing, Tien Foo, 2001. "Dynamics of the Condominium Market in Singapore," International Real Estate Review, Asian Real Estate Society, vol. 4(1), pages 135-158.
  • Handle: RePEc:ire:issued:v:04:n:01:2001:p:135-158
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    Cited by:

    1. Eddie C. M. Hui & Ka Kwan Kevin Chan, 2011. "Are the global real estate markets contagious?," International Journal of Strategic Property Management, Taylor & Francis Journals, vol. 16(3), pages 219-235, November.
    2. Jiang, Liang & Phillips, Peter C.B. & Yu, Jun, 2015. "New methodology for constructing real estate price indices applied to the Singapore residential market," Journal of Banking & Finance, Elsevier, vol. 61(S2), pages 121-131.
    3. Min Hwang & John Quigley, 2010. "Housing Price Dynamics in Time and Space: Predictability, Liquidity and Investor Returns," The Journal of Real Estate Finance and Economics, Springer, vol. 41(1), pages 3-23, July.
    4. Liang Jiang & Peter C.B. Phillips & Jun Yu, 2014. "A New Hedonic Regression for Real Estate Prices Applied to the Singapore Residential Market," Working Papers 19-2014, Singapore Management University, School of Economics.
    5. Eddie C. M. Hui & Sheung-Chi Phillip Yam & Si-Wei Chen, 2011. "Shiryaev-Zhou index -- a noble approach to benchmarking and analysis of real estate stocks," International Journal of Strategic Property Management, Taylor & Francis Journals, vol. 16(2), pages 158-172, September.

    More about this item

    Keywords

    Seniors housing; Korea; consumer behavior; housing policy;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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