HDB INCOME CEILING AND HOUSING AFFORDABILITY

Abstract

This study aims on examining housing affordability with reference to the raise in income ceiling on prices for public housing units, as well to discover any possible spillover effects on the private housing market. There has been a total of two raises in income ceiling, which took place in August 2011 and August 2015, whereby the raises are driven by changing demographics. With reference to the demand and supply theory, the increase in demand will lead to the increase in price, everything else remaining constant. A Regression Discontinuity Design (RDD) is utilized in this study to examine the impact the raised income ceiling has on prices for the different housing types. Results have shown that while the impact of the raised income ceiling do not have much statistically significant results, there is a statistically significant impact of the raised income ceiling on the prices of condominiums. The magnitude of the effects of raising the income ceiling on the prices of ECs are shown to be ranging from 19% to 76%, which is a significant value.