THE IMPLICATIONS OF HOUSING ANTI-SPECULATION MEASURES ON BUYER SENTIMENTS IN SINGAPORE

Abstract

The Singapore private residential market underwent a great boom in 2009 with strong and sustainable economic recovery from the 2008 Global Financial Crisis. The private residential property prices surged 15.7% q-o-q in 3Q2009 (REALIS, 2015), fueling the formation of a housing bubble with optimistic sentiments and speculative activities in the market. This prompted the Singapore government to step in with a series of anti- speculation measures to ensure the stability of the property market where prices move in line with economic fundamentals. This paper is thus motivated by the role of behavioral factors in driving the private housing market and the implications of anti- speculation measures on buyer sentiments. The study adopts a private residential market analysis and an empirical study using binary logistic regression to examine the implications of anti-speculation measures and identify the significant factors influencing buyer sentiments. The findings conclude that notwithstanding the ten rounds of anti-speculation measures, buyer sentiments in the private condominium market are generally positive with majority homebuyers intending to exercise their purchase decisions within this year. Additionally, the measures are effective to a certain extent in limiting speculation as genuine homebuyers rather than speculators dominate the private housing market after ten rounds of implementation. This is evidenced by the decrease in sub-sales for eight quarters since 1Q2013 and results from the empirical study reveal that buyer purchase decisions are not affected by transaction taxes. Furthermore, the empirical study identified income, property type, market sentiment on home prices, housing loan limit, interest rate and the perception of anti-speculation measures as significant variables affecting buyer sentiments.