SELLER'S BEHAVIOUR IN THE HDB RESALE MARKET : CONSUMPTION VERSUS INVESTMENT MOTIVE

Abstract

The Housing and Development Board (HDB) was established in the 1960 with the main aim of providing affordable public housing to the population in Singapore (Housing & Development Board, 2011a). It has helped many household residents own a home which they call their own. However in the recent years, the policy of providing public housing may have lost its notion amidst rising property prices. The initial objective of providing affordable housings has, along the years, been called into question and challenged by the aggrieved population. With the rapid growth of prices in HDB resale market in the last decade, even the common man without any background knowledge of the property market, would have predicted that prices are most likely going to increase, perhaps exponentially. Will public housing then be regarded as an investment good that allows homeowners to reap the capital gains? Or that the rising prices are caused by genuine demand arising from the change in consumption pattern of the household population in Singapore. In this study, we investigate whether rising prices entice homeowners to sell their flat in the public resale market. Furthermore, we examine the various factors that would be associated with sellers’ motivation and understand the driving forces behind homeowners’ decision to sell their flat. Lastly, this study will shed light on whether public homeowners regard their property as an investment good.