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Title: Housing Wealth Effects in Singapore: Public Housing versus Private Housing
Keywords: Wealth effect, Singapore housing market, CPF, Public housing, Private housing, Consumption
Issue Date: 18-Aug-2010
Citation: CHEN SHILU (2010-08-18). Housing Wealth Effects in Singapore: Public Housing versus Private Housing. ScholarBank@NUS Repository.
Abstract: This study aims to explore whether appreciation in housing prices affects consumption in Singapore, and whether private housing and public housing exhibit different wealth effects. Using aggregate data, the empirical results show no significant private housing wealth effects or public housing wealth effects in the Q1:1975-Q4:2009 period and Q1:1990-Q4:2009 period respectively. Nevertheless, there is evidence of asymmetric effects in private housing market, with consumption responding significantly towards price increases while remaining stable during price downturn. It is also observed that there was a structural change in public housing and public housing wealth effects started to be significant in 2003, when a series of policies were introduced to boost the public housing market. The role of the Central Provident Fund (CPF) is extensively examined in this study. The results show that the CPF wealth effects are not statistically significant. However, the shocks in the balances of the CPF accounts tend to have a more persistent impact on consumption compared to housing wealth shocks. Additionally, the CPF is found to have a positive and significant impact on public housing prices though its influence on private housing prices is limited.
Appears in Collections:Master's Theses (Open)

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