CHANGES IN CPF AND HOUSING POLICIES AND ITS IMPACT ON THE PRIVATE RESIDENTIAL MARKET

Abstract

The Straits Times, 22nd July 2002 announced the implementation of the new CPF and housing policies. This is to colloquial the government's response to the proposals by the Economic Review Committee's CPF subcommittee. The main focus of this study is to examine the private residential property demand patterns of the new policies based on two time periods. These comprise the period where the change in policies is made. Statistical tests show that the new policies do not cause a change in demand pattern of buyers. The impact of the measures on demand of private residential properties is uniform irrespective of type, location and housing status of buyers. A personal survey conducted by the author reveals that the fairness and effectiveness of the new policies are dependent on age and income factor. Cash downpayment is a useful tool to cause upwards or downwards demand for properties in a short-term period, which lasted at most two months. The 150% cap on withdrawal limit is considered by the majority to be a future thing. First-timers are more hesitant to go into the market during the "Hungry Ghost Festival". However Cash downpayment and availablility of choice units are two important factors to lure potential buyers into the market even during the Chinese lunar seventh month.