THE IMPACTS OF ANTI SPECULATION POLICIES ON THE HOUSING MARKETS IN SINGAPORE

Abstract

Property speculation has been the buzz word in the recent years when residential property price and demand hit all-time high record. It has inevitably attracted government interventions on the red-hot property market. This study is thus motivated by the four rounds of property cooling measures implemented in just two years since 2009. It aims to analyse the impacts of these policies on the residential market performance through time series analysis and market survey. In doing so, it provides assessment of the effectiveness of property cooling measures in curbing speculation and stabilizing residential property price. Binary logistic regression and factor analysis technique is adopted to analyze the survey result. This study has found that the anti-speculation measures are effective to a certain extent in curbing speculation, evidenced by the several quarters’ consecutive fall of rate of increase of property price. Private property transaction volume, especially sub-sales is also observed a slight decline in light of the cooling measures. However, to a large extent, the overall buyer sentiment remains positive and the degree of the impact due to cooling measures is considered as subtle and temporary against the impact brought by economic downturns. Binary logistic regression model further reveals that while cooling measures are significant in affecting private property speculators’ buying decision, it is insignificant in affecting the overall market sentiment as majority of the market players are genuine home buyers. It has identified that economic determinants such as housing loan interest rate, economic condition, demographic profile of buyers, market psychology and future property plan such as budget, purpose of purchase, type of property intended to buy are significant variables in affecting a person’s buying behaviour.