Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/223870
Title: INCOME INEQUALITY AND HOUSE PRICE APPRECIATION IN SINGAPORE
Authors: LEONG KIN MUN
Keywords: Real Estate
RE
Seah Kiat Ying
2012/2013 RE
House price appreciation
Income inequality
Singapore
Issue Date: 26-Apr-2013
Citation: LEONG KIN MUN (2013-04-26). INCOME INEQUALITY AND HOUSE PRICE APPRECIATION IN SINGAPORE. ScholarBank@NUS Repository.
Abstract: This study seeks to identify and quantify the relationship between income inequality and house price appreciation in Singapore. Through the literature review, the direction of causation is ascertained, by which income inequality causes house price changes. Income inequality, using Gini coefficient as a measure, is incorporated as an explanatory variable, together with other macroeconomic variables, into the multi-linear regression models, to investigate the impact of income inequality on price changes of HDB resale flats and private residential properties, from 1st Quarter 2001 to 4th Quarter 2012. Apart from finding out the possible relationship between these two variables, another objective of the study is to compare the impact of income inequality on price changes of HDB resale flats and private residential properties respectively, using changes in house price indices as the indicator. Correlation tests which were carried out showed a relatively strong association between income inequality and house price appreciation. Regression findings showed that the magnitude and direction of impact of the explanatory variables were accurate in relation to theory, to describe effects of house price changes. As for the explanatory variable of Gini coefficient, which this study is interested in, it showed a positive and statistically significant regression coefficient. This meant that income inequality does indeed cause an increase in house prices. In addition, it is observed that there is difference in the magnitudes of regression coefficients for the Gini variable for the two separate models (HDB resale and private residential), with the HDB resale model registering a higher one for the Gini coefficient. Although literature review talks about similarities in these two markets and that price changes in these markets are closely aligned, there are still some slight differences in the impact of certain variables on housing price appreciation.
URI: https://scholarbank.nus.edu.sg/handle/10635/223870
Appears in Collections:Bachelor's Theses

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