HERDING BEHAVIOUR IN THE SINGAPORE PRIVATE RESIDENTIAL MARKET

Abstract

This study examines the herding behaviour of the Singapore private residential market. The presence of herding was tested by augmenting the approach in a study by Chang, Cheng & Khorana (2000) where the relationship between an overall market index return and the cross-sectional absolute deviation of the respective sectors within the market is examined. It is found that herding exists in the condominium, apartment, semi-detached and detached sectors of the Singapore private residential market. The only exception is the terrace sector that did not demonstrate any herding behaviour. The study then examines the existence of asymmetric information within the market, and it found no asymmetrically difference between the upmarket and downmarket.