Evaluating Singapore’s Housing Policies: A Bounds Testing Approach
The Singapore housing market is unusual in the dominance of privately-owned government-built housing coexisting with openness to foreign investments in the private housing sector. Recent rapid population increases in a low interest rate and high global liquidity environment has resulted in accelerat...
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sg-smu-ink.lkcsb_research-58682016-01-27T08:54:07Z Evaluating Singapore’s Housing Policies: A Bounds Testing Approach LEE, David Kuo Chuen, XIE, Taojun The Singapore housing market is unusual in the dominance of privately-owned government-built housing coexisting with openness to foreign investments in the private housing sector. Recent rapid population increases in a low interest rate and high global liquidity environment has resulted in accelerated house prices increases in Singapore. The Singapore government responded with several consecutive rounds of measures to stabilize housing prices. This provides a unique opportunity to study the degree of success of various government measures to maintain house price stability. In this paper, we first construct a set of indices for the government‘s cumulative efforts in stabilizing the housing market, following Zhang and Zoli (2014) and based on the government policy statements from June 1981 to December 2013. We then test for cointegrating relationships between the housing policies vis-à-vis property price, transaction volume and sales value using Pesaran (2001) bounds test for cointegration. Our findings are as follows. First, Singapore‘s housing policy has significant counter-cyclical impacts on property transaction volume and sales values in both the long-run and the short-run. Second, cooling measures initiated in September 2009 have been effective at least in the short-run horizon. Third, different types of housing policy have different effectiveness: debt-to-income ratio measures are effective in the long-run, while capital gain tax, loan-to-value ratio and Central Provident Fund measures are effective in the short-run horizon. 2015-08-07T07:00:00Z text https://ink.library.smu.edu.sg/lkcsb_research/4869 Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Asian Studies Finance and Financial Management Real Estate |
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Asian Studies Finance and Financial Management Real Estate LEE, David Kuo Chuen, XIE, Taojun Evaluating Singapore’s Housing Policies: A Bounds Testing Approach |
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The Singapore housing market is unusual in the dominance of privately-owned government-built housing coexisting with openness to foreign investments in the private housing sector. Recent rapid population increases in a low interest rate and high global liquidity environment has resulted in accelerated house prices increases in Singapore. The Singapore government responded with several consecutive rounds of measures to stabilize housing prices. This provides a unique opportunity to study the degree of success of various government measures to maintain house price stability. In this paper, we first construct a set of indices for the government‘s cumulative efforts in stabilizing the housing market, following Zhang and Zoli (2014) and based on the government policy statements from June 1981 to December 2013. We then test for cointegrating relationships between the housing policies vis-à-vis property price, transaction volume and sales value using Pesaran (2001) bounds test for cointegration. Our findings are as follows. First, Singapore‘s housing policy has significant counter-cyclical impacts on property transaction volume and sales values in both the long-run and the short-run. Second, cooling measures initiated in September 2009 have been effective at least in the short-run horizon. Third, different types of housing policy have different effectiveness: debt-to-income ratio measures are effective in the long-run, while capital gain tax, loan-to-value ratio and Central Provident Fund measures are effective in the short-run horizon. |
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LEE, David Kuo Chuen, XIE, Taojun |
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LEE, David Kuo Chuen, XIE, Taojun |
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LEE, David Kuo Chuen, |
title |
Evaluating Singapore’s Housing Policies: A Bounds Testing Approach |
title_short |
Evaluating Singapore’s Housing Policies: A Bounds Testing Approach |
title_full |
Evaluating Singapore’s Housing Policies: A Bounds Testing Approach |
title_fullStr |
Evaluating Singapore’s Housing Policies: A Bounds Testing Approach |
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Evaluating Singapore’s Housing Policies: A Bounds Testing Approach |
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evaluating singapore’s housing policies: a bounds testing approach |
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Institutional Knowledge at Singapore Management University |
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2015 |
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https://ink.library.smu.edu.sg/lkcsb_research/4869 |
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