SINGAPORE PRIVATE HOUSING PRICE DYNAMICS BETWEEN Q12003- Q42012: DEMAND PERSPECTIVE

Abstract

In this paper private housing price dynamics are investigated from the demand perspectives. The time frame for study was the period with many shifting exogenous effects ranging from global market forces to internal interferences by Singapore government. This period experiences the most number of property-specific cooling measures in Singapore history which could only mean Singapore property market needed much attention and corrections. This also assumes a question that if there are any new factors affecting housing price besides those conventional and established factors. This paper studies price effect and establishes a long run relationship between house price and a group of interested variables. This group comprises of supply of housing stock, GDP per capita, user cost of capital, unemployment rate and number of marriages. The last factor, number of marriages variable has not been explored to conclude any relationship with price fluctuations before. The paper has found a long run relationship between price and marriage. However it is yet to conclude any conclusion for short run shocks. It may require a longer time frame for more conclusive result. For the short run determination, user cost and unemployment rate and the autocorrelation of housing prices with one lag explain most of the short-run dynamics of private house price. This short run equilibrium remains valid as reported in past studies.