GOVERNMENT INTERVENTION IN THE OFFICE MARKET

Abstract

Government intervention seems indispensible given the characteristics of the property market being one of the least perfect markets due to its heterogeneity. Moreover, due to the scarce amount of land in Singapore, government intervention is needed to adjust and maintain the supply equilibrium in the office market.

The objective of this study is to determine the government’s reaction during economic crises in relation to policy introductions and, to study and analyze the effect of government intervention on the office market in the central area. The study will be a descriptive analysis based on the observation of the Singapore office market in relation to the effects of policy introduction on it.

The government was consistent in their policy introductions as they always intervened during periods of recession. They were reactionary in introducing policies as they usually announce policies after seeing the effect of the recession on the economy and the office market. The government took action in distinct times through the government land sales programme and is an active agent in managing the amount of supply entering the market. The effects of the land sales policies were mainly seen on supply. Demand, vacancy and rents were indirectly affected as supply decreased.