INDUSTRIAL ORGANISATION IN THE SINGAPORE PRIVATE NON-LANDED RESIDENTIAL PROPERTY DEVELOPMENT SECTOR

Abstract

This paper seeks to examine the real estate industry in the context of industrial organisation - an economic concept built on the foundation of the Structure-Conduct-Performance paradigm, which postulates that the firms’ behaviour is very much affected by the market structure that the firms operate in. Of the wide scope of topics covered in the industrial organisation literature, this paper will particularly study on how the market concentration of the Singapore non-landed residential industry will affect the developers’ output decisions. Quantitative analyses have been carried out to observe the trend of the market concentration over the past 10 years, and see if there is any association between the market concentration and the total number of non-landed residential units launched by the developer. It has been discovered that over the years, the Herfindahl-Hirschman Index of the sector has been sliding downwards, due to the nature of land bidding in Singapore, and the increasing participation of firms. It has also been found out that the total units launched by the developers have a positive relationship with the number of developers in the period, while exhibit a negative association with the market concentration index of the previous period.