Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/223441
Title: HOW SHOULD WE VIEW SPECULATION IN SINGAPORE PRIVATE RESIDENTIAL PROPERTY MARKET?
Authors: TAN TZE CHIA
Keywords: Real Estate
RE
Seah Kiat Ying
2007/2008 RE
Issue Date: 13-Jul-2017
Citation: TAN TZE CHIA (2017-07-13). HOW SHOULD WE VIEW SPECULATION IN SINGAPORE PRIVATE RESIDENTIAL PROPERTY MARKET?. ScholarBank@NUS Repository.
Abstract: The speculative market perspective is that price movements are driven by irrational price expectations rather than market fundamentals. This dissertation attempts to explain the reasons for the price movements in Singapore private residential property market. It evaluates transaction volume as a measure of housing speculation by focusing on the extent to which volume affects price changes in the Singapore private residential property market. First, it investigates the causal relationships between transaction volume and price change in the Singapore private home market by using the Granger causality test. The results show that transaction volume does lead to price movements when lagged order of 1 is used. Subsequently, the multiple regression models that investigate the effect of transaction volume on price movements are presented. The empirical study covers a sample period of 13 years from 1995 to 2007. The results indicate that housing price change is positively and significantly related to one-quarter lagged transaction volume. In evaluating transaction volume as a measure of housing speculation, this dissertation uses the number of sub sale as a proxy for speculative activities. The empirical results showed that the number of sub sale has a positive effect on price movements. For every 100 number of sub sales, the price change is increased by approximately 4%. These findings suggest that housing price movements may be decomposed into two components – the fundamental component (which is driven by factors such as real GDP, prime lending rate, stock market volatility and housing stocks) and the speculative component.
URI: https://scholarbank.nus.edu.sg/handle/10635/223441
Appears in Collections:Bachelor's Theses

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