EVALUATION OF THE ANTI-SPECULATIVE MEASURES AND THE OPTIMAL TIME TO LIFT THE CURBS

Abstract

Singapore has a small land area, with accommodation an area of concern for the Singaporeans. In recent years, genuine home buyers are priced out of the residential property market due to soaring property prices. It has inevitably led to government interventions on the hot property market. Since 2009, anti-speculative measures were implemented to attempt to curb speculative activities and to cool the property market. This paper seeks to evaluate the true impact of the anti-speculative measures via-à-vis the property market through hedonic regression approach and repeat sales approach. By analyzing the private property transacted prices before and after the implementation of the anti-speculative measures, it provides assessment of the effectiveness of the anti-speculative measures in stabilizing the property market. The results from this study conclude that the most effective anti-speculative measure is the introduction of the Total Debt Servicing Ratio (TDSR) framework. The TDSR prevents borrowers from over-leveraging. The government should consider lifting the anti-speculative measures if prices stumble below the private property index of 177.5 points or the transaction volumes fall below the average of 15,000 private residential units per year.