HOUSING MARKET DYNAMICS AND TRANSACTION TAXES

Abstract

This thesis contains two studies that take Singapore private housing market as the field of experiment. The first study compares the behaviors of different housing investors, namely owner occupiers, rental housing investors and flippers. It finds that flippers as buyers and sellers have the highest trading ability and lowest propensity of trend chasing. The above two characteristics of flippers imply that the flippers are more likely to act as housing market intermediaries. The second study empirically demonstrates the lock-in effects of a seller’s stamp duty on individual housing investors, demonstrates how the aggregate of the lock-in effects reduce the liquidity of sub housing markets, and reveals how a seller’s stamp duty inhibits the impacts of subsequent policy interventions for curbing housing price escalation. The thesis contributes to the micro-structure theory. Moreover, it is the first research that demonstrates the sequence of policy interventions matters for policy effectiveness.