Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/226158
Title: A STRUCTURAL DYNAMIC MODEL BETWEEN THE ECONOMY AND THE REAL ESTATE SECTOR
Authors: TENG ZHAOYU
Issue Date: 2004
Citation: TENG ZHAOYU (2004). A STRUCTURAL DYNAMIC MODEL BETWEEN THE ECONOMY AND THE REAL ESTATE SECTOR. ScholarBank@NUS Repository.
Abstract: The retail real estate sector generates the highest yield compared to other real estate sectors in Singapore. The estimated capital value of retail space as at December 2000 is approximately S$87 billion, which accounted for 62.1 per cent of Singapore's gross domestic product (GDP). Hence, it can be seen that the retail sector plays a fundamental growth stimulus to the Singapore economy. However, there remains limited local research that looks into the impact of economic conditions on the retail real estate sector. Most research fails to recognize the importance of the demand and supply factors that affect the retail real estate sector. The significance of this study is to investigate how the macroeconomy affects the retail real estate sector and vice versa, through a combination of state-of-the-art system dynamics modelling and advanced econometric modelling. The investigation also tests the sensitivity of the economy to changes in key macro economic factors and examines the implications for retail real-estate sector policy. The model has provided a reliable tool for forecasting retail market movement enabling real estate developers to exercise better judgement in decision-making. The results from the scenario analysis found that the prime retail real estate sector in Singapore is in the maturation phase, while the suburban retail real estate sector is found to be still in a developing phase. The latter is on the whole more susceptible to GDP growth policy that affects both GDP expansion in actual terms and expectations for retail rents and returns.
URI: https://scholarbank.nus.edu.sg/handle/10635/226158
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