EFFECTS OF GOVERNMENT POLICIES ON THE SINGAPORE PROPERTY MARKET

Abstract

Private residential property price appreciations in Singapore were supported mainly by the economic performance of the country and the people's confidence in Singapore's economic growth and stability. A host of government's policies, especially in the liberalisations on the usage of CPF savings for property acquisitions and the relaxation of the rules on the dual ownership of a private property and a flat managed by HDB, had boosted the rise in property prices too. However, such positive market sentiments provided a conducive breeding ground for speculation to arise. Speculative activities grew rapidly in the Singapore property market from 1992 to early 1996 to reach a size which posed a threat to the stability of the economy. This prompted the government to come up with anti-speculative policies on 14 May 1996 to correct the imbalances. The aim of this study is twofold. Firstly, it is to examine how the policies introduced by the government prior to 1996 had affected the private property prices in Singapore. The second objective is to evaluate the effects which the anti-speculative policies implemented in May 1996 have on the private residential property market. In particular, it will look into how these policies have affected the property prices, transaction volume, market sentiments and the demand and supply of private properties