EFFECTIVENESS OF ANTI-SPECULATION MEASURES ON CONDOMINIUM MARKET

Abstract

In recent years, Singapore’s residential housing prices have been setting new records; with high prices fueled by strong demand. This has resulted the government implementing various policies since September 2009 in order to lower housing prices and speculative activity. This paper thus endeavours to analyse the effectiveness of anti-speculative measures undertaken by the government, by studying the impact of the various cooling measures on the private residential property market on condominium transaction volumes and average price psm. Additionally, this paper hopes to determine which form of anti-speculative measures has been the most effective in curbing property speculation. The research design of this paper is based on a qualitative examination of the impact of the anti-speculation package, using transaction volumes and average prices from online databases to construct a data set. A qualitative approach is more appropriate in this case as quantitative methods would be ineffective and far too complex given how the various anti-speculation measures are largely intertwined in nature. Additionally, it would be far too challenging to separate the individual effects of each round. As such, a qualitative research design could provide greater clarity on perspective for this study. The main source of data was from REALIS, which up to date and accurate information about monthly transaction volumes, average housing prices psm, and ratio of HDB buyers to private buyers for the condominium market. Quarterly GDP growth rates were also obtained from the MTI website. Other secondary research material includes various academic journals and newspaper articles from a variety of sources. Research results have indicated that overall, the slowdown in the private residential property market was largely due to the anti-speculation package, particularly the most recent measures that were introduced in 2013. Because of the cooling measures, transaction volumes fell by a considerable extent. However, average prices psm did not react as positively to the cooling measures. This is because there are many other factors influencing prices, and they take longer to respond to policy measures. Generally, it can be said that the anti-speculation packages was indeed effective in cooling the overheated property market, although it is apparent that some measures were largely more effectual than others. However, as a whole, all the measures were necessary, and support each other in creating a stable and sustainable property market. This study allows readers to understand the impact of the anti-speculation measures on the private residential property market, and highlights to policymakers that such efforts to ensure stability in the property market should be sustained, with constant monitoring.