EFFECTS OF SALES RESTRICTIONS ON EXECUTIVE CONDOMINIUMS ON BUYERS � TRANSACTIONAL BEHAVIOURS

Abstract

The Executive Condominium (EC) scheme is a hybrid form of housing that has elements of both public and private housing characteristics. This form of housing was developed to cater specifically for the “sandwiched” class in Singapore, providing them with the private lifestyle at affordable levels. However, recent debates about the practicality of such a scheme in channeling public funds into helping this group of people enter the private housing market and also the development of overly luxurious penthouse ECs has sparked the initial interest in exploring this topic. This study seeks to empirically analyse the effects of sales restriction on the transactional behaviour of the Executive Condominium (EC) owners in Singapore and also their relevant impacts on the valuation of the EC units. This is done through the use of a difference-in-differences framework. The difference-in-differences framework utilizes the intervention of an exogenous policy announcement event, the resumption of EC land sales in the Government Land Sales (GLS) programme. The outcome of this study revealed that the sales restriction on EC units have a positive impact on the holding period of an EC homeowner while it discounts the valuation price of an EC unit. However, the announcement of the resumption of EC land sales in the GLS programme saw a decline in average holding period vis-à-vis private homeowners which might be caused by the attempts from homeowners to beat the market before the EC prices fall as a result of the increased supply of EC developments in the market.