The effects of housing policies on life-cycle housing choice of Singapore households

Abstract

This study explores the life-cycle housing consumption choice of Singapore households. In particular, we will focus on the public housing policy effects on life-cycle housing choice.In the study, we observe a difference in life-cycle housing choices between new-flat buyers and resale buyers. The housing consumption for new-flat buyers appears to shift forward in anticipation of longer-term housing needs and possible income ceiling restriction. Our empirical findings suggest that government regulations on housing market can distort householdsa?? life-cycle housing consumption choice. With the higher adjustment cost due to the longer minimum occupied period, households would compromise their housing choice between short-term needs and long-term needs, which results in a welfare loss. The welfare loss would be more significant for households with higher permanent income, whose life-cycle housing choice pattern differ more pronouncedly between the new-flat market and resale market.