A NEW SENTIMENT INDEX, INCLUDING THE USE OF GOOGLE TRENDS DATA, AND ITS SIGNIFICANCE TO PROPERTY PRICES, FOR PRIVATE NON-LANDED RESIDENTIAL MARKET IN SINGAPORE
QUAK WEI RONG ALOYSIUS
QUAK WEI RONG ALOYSIUS
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Abstract
This paper aims to compensate for the limitations of the current Real Estate Sentiment
Index (RESI) with a supplementary measurement of sentiment. It utilizes empirical data
to identify current sentiment via proxy indicators. A New Sentiment Index (NSI) is crafted,
evaluated and used to project the influence of current sentiment on future prices, for
Singapore’ private non-landed residential property market.
The NSI is constructed based on proxy indicators derived from transaction data. Trend
comparison and data analysis against the SRX Property Price Index (SPI) of private nonlanded
residential properties are carried out, emulating the relationship between
sentiment and price.
Four determinants of sentiment are identified, foreign capital inflow, liquidity, take-up
rate, and information flow. Six proxy indicators are formulated to represent these
determinants. Based on the analysis conducted, this study has identified five out of the
six to be statistically significant to sentiment, eliminating foreign capital inflow. The data
from Google Trends is found to be statistically significant within a 95% confidence
interval, as a representation of Information Flow.
Findings show sentiment to be a close fit to price; impacting prices after a four to fivemonth
reaction time. Past and current sentiment portray a downward trend, negatively
influencing the future prices. However, sentiment is seen to be stabilizing over recent
years.
Keywords
Real Estate, RE, Qin Yu, 2016/2017 RE, Consumer Confidence, Google Trends, Investor Sentiment, Property Prices, Sentiment Index
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Date
2017-05-19
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Dissertation