RELATIONSHIP BETWEEN THE PRICES OF PUBLIC & PRIVATE HOUSING

Abstract

In recent months, private housing achieved new benchmark prices, causing widespread concern as to whether these heady levels can and should be sustained. Meanwhile, long queues continue to form outside show flats amid media reports of record sell-outs. In seeking to understand the complex interactions taking place in the Singapore private housing market at the moment, one need to look at the housing market in its totality, that is, as comprising two segments, public and private. Evidence suggests that both segments are becoming increasingly inter-related. This study attempts to determine the effect of changes in the public housing market on private housing in Singapore. It gives an account of the background of Singapore housing markets over the last 2 decades. It covers both the market development and performance, showing the time series data of various property types for both public and private markets. This is to form the backbone for statistical works on the correlation between prices of public and private housing in 3 selected housing estates and an analysis of the correlation coefficient and its p-values. It attempts to explain the correlation between the prices of public and private housing markets. There is also some discussion on other factors that will influence the prices of both the public and private housing. These factors are stock market performance, Gross Fixed Capital Formation, Gross Domestic Product, Population and Household Formation, and, Prime Lending Rates and Withdrawal of Central Provident Fund.