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Articles 1 - 30 of 48
Full-Text Articles in Real Estate
Unpacking Singapore's Leasehold Relativity Table: An Empirical And Legal Analysis, Koon Shing Kwong, Jing Rong Goh, Seng Wei, Edward Ti
Unpacking Singapore's Leasehold Relativity Table: An Empirical And Legal Analysis, Koon Shing Kwong, Jing Rong Goh, Seng Wei, Edward Ti
Research Collection School Of Economics
In Singapore, most land is state-owned, with the state generally issuing leasehold estates via state leases of not more than 99 years1, depending on the intended land use. Naturally, the value of a leasehold estate, which erodes over time as the lease approaches the end of its term, is a key component of the premium charged for lease renewals, or the tax imposed for permission given in relation to a development that would increase the value of the land. By law, the state valuation of leasehold land is prescribed by a leasehold relativity table colloquially known as ‘Bala’s Curve’ or …
Redesigning Home Reversion Products To Empower Retirement For Singapore's Public Flat Owners, Koon Shing Kwong, Jing Rong Goh, Jordan Jie Xin Lee, Ting Lin Collin Chua
Redesigning Home Reversion Products To Empower Retirement For Singapore's Public Flat Owners, Koon Shing Kwong, Jing Rong Goh, Jordan Jie Xin Lee, Ting Lin Collin Chua
Research Collection School Of Economics
This paper introduces an innovative sell-type home reversion product aimed at monetizing Singapore’s public flats, serving as a new alternative to the existing Singapore Lease Buyback Scheme (LBS). This new product not only retains the LBS’s guaranteed period of residence in the property along with life annuity incomes but also enhances the product features to meet specific homeowner needs, including the ability to age in place, flexibility in retaining part of the property, options for bequests, and guaranteed principal return. By incorporating these additional features, the new product seeks to stimulate greater demand for monetizing public flats among asset-rich but …
Value Capture And Affordable Housing: Insights From Singapore, Sock Yong Phang
Value Capture And Affordable Housing: Insights From Singapore, Sock Yong Phang
Research Collection School Of Economics
To explain the role of value capture in Singapore’s progress, I will first provide some background information on Singapore and its housing sector. I will then take you on a journey back to the 1960s to show how we established our present institutional arrangements for land and housing. I will next describe how housing policies have evolved over the past six decades in response to changing contexts. Finally, I will conclude with the fiscal implications of successful value capture. Where relevant, I will indicate how Singapore’s policies align with George’s views.
Bubbly Booms And Welfare, Feng Dong, Yang Jiao, Haoning Sun
Bubbly Booms And Welfare, Feng Dong, Yang Jiao, Haoning Sun
Research Collection School Of Economics
We show the competing effects of a housing bubble on the real economy by developing a multi-sector dynamic model with housing production. On the one hand, firms can sell or collateralize their housing, so a housing bubble helps firms obtain credit to finance their investment and expand production. On the other hand, a boom in the housing sector crowds out labor in the non-housing sector. We show that housing booms can reduce social welfare both in the steady state and in the transitional dynamics only when the production externalities in the non-housing sector are sufficiently large. We quantitatively evaluate our …
Enhancing Sell-Type Home Reversion Products For Retirement Financing, Koon Shing Kwong, Jing Rong Goh, Ting Lin Collin Chua
Enhancing Sell-Type Home Reversion Products For Retirement Financing, Koon Shing Kwong, Jing Rong Goh, Ting Lin Collin Chua
Research Collection School Of Economics
Loan-type reverse mortgage plans and sell-type home reversion plans for retirement financing are two well-known equity release plans that entitle homeowners not only to release cash from their properties but also to allow them to age in place. Recently, a new hybrid equity release plan was proposed to incorporate the home reversion plan’s features with an option of staying in the property for a fixed period without being subject to survival. This additional option provides flexibility to homeowners to better meet their retirement financial and personal needs by reducing the financial uncertainty of home reversion products. In this article, we …
Housing Fever In Australia 2020-23: Insights From An Econometric Thermometer, Shuping Shi, Peter C. B. Phillips
Housing Fever In Australia 2020-23: Insights From An Econometric Thermometer, Shuping Shi, Peter C. B. Phillips
Research Collection School Of Economics
Australian housing markets experienced widespread and, in some cases, extraordinary growth in prices between 2020 and 2023. Using recently developed methodology that accounts for fundamental economic drivers, we assess the existence and degree of speculative behaviour, as well as the timing of exuberance and downturns in these markets. Our findings indicate that speculative behaviour was indeed present in six of the eight capital cities at some time over the period studied. The sequence of events in this nation-wide housing bubble began in the Brisbane market and concluded in Melbourne, Canberra, and Hobart following the interest rate rise implemented by the …
The Impact Of Upzoning On Housing Construction In Auckland*, Ryan Greenaway-Mcgrevy, Peter C. B. Phillips
The Impact Of Upzoning On Housing Construction In Auckland*, Ryan Greenaway-Mcgrevy, Peter C. B. Phillips
Research Collection School Of Economics
There is a growing debate about whether upzoning is an effective policy response to housing shortages and unaffordable housing. This paper provides empirical evidence to further inform debate by examining the various impacts of recently implemented zoning reforms on housing construction in Auckland, the largest metropolitan area in New Zealand. In 2016, the city upzoned approximately three quarters of its residential land to facilitate construction of more intensive housing. We use a quasi-experimental approach to analyze the short-run impacts of the reform on construction, allowing for potential shifts in construction from non-upzoned to upzoned areas (displacement effects) that would, if …
Diagnosing Housing Fever With An Econometric Thermometer, Shuping Shi, Peter C. B. Phillips
Diagnosing Housing Fever With An Econometric Thermometer, Shuping Shi, Peter C. B. Phillips
Research Collection School Of Economics
Housing fever is a popular term to describe an overheated housing market or housing price bubble. Like other financial asset bubbles, housing fever can inflict harm on the real economy, as indeed the U.S. housing bubble did in the period following 2006 leading up to the general financial crisis and great recession. One contribution that econometricians can make to minimize the harm created by a housing bubble is to provide a quantitative “thermometer” for diagnosing ongoing housing fever. Early diagnosis can enable prompt and effective policy action that reduces long-term damage to the real economy. This paper provides a selective …
Housing Wealth Shocks, Home Equity Withdrawal, And The Claiming Of Social Security Retirement Benefits, Naqun Huang, Li Jing, Amanda Ross
Housing Wealth Shocks, Home Equity Withdrawal, And The Claiming Of Social Security Retirement Benefits, Naqun Huang, Li Jing, Amanda Ross
Research Collection School Of Economics
This paper examines the impact of changes in house prices on when eligible individuals start receiving Social Security benefits. If house prices increase, financially constrained households may draw upon the additional home equity to finance expenses and delay receipt of Social Security in order to have increased lifetime monthly benefits. To address concerns that house price changes are correlated with unobserved local demand shocks, we use a control function approach and employ two different instrumental variables. We find that individuals delay Social Security claiming when house prices increase during the housing boom. The probability of claiming within two years after …
Forced Moves And Home Maintenance: The Amplifying Effects Of Mortgage Payment Burden On Underwater Homeowners, John Harding, Li Jing, Stuart Rosenthal, Xirui Zhang
Forced Moves And Home Maintenance: The Amplifying Effects Of Mortgage Payment Burden On Underwater Homeowners, John Harding, Li Jing, Stuart Rosenthal, Xirui Zhang
Research Collection School Of Economics
Although the adverse effect of high loan to value ratios (LTV) on mortgage default is known, the potential amplifying effect of high payment-to-income (PTI) ratios that can force families out of their homes has received limited attention. High PTI and LTV can also add to default costs by discouraging home maintenance. Using the 1985-2013 AHS panel, we show that high PTI prompts families to move and especially so for households with LTV above 120%. This lends support for policies like HAMP and HARP that seek to reduce forced moves and mortgage default by lowering mortgage payment burden for financially stressed …
Hedonic Price Of Housing Space, Sumit Agarwal, Yanying Chen, Li Jing, Yi Jin Tan
Hedonic Price Of Housing Space, Sumit Agarwal, Yanying Chen, Li Jing, Yi Jin Tan
Research Collection School Of Economics
This article estimates hedonic prices for different levels of housing space, by exploiting a unique space‐adding project in Singapore that added a uniform amount of space to each existing housing unit regardless of the original size. This space adding program was carried out if sufficient residents vote in favor of space adding. Using a difference‐in‐differences (DiD) strategy after restricting our sample to narrow margins around the voting cutoff, we find that the additional space increased the resale price of a housing unit by 7% on average, and the extent of price appreciation varied significantly across the original size of the …
House Prices And Affordability, R. Greenaway-Mcgrevy, Peter C. B. Phillips
House Prices And Affordability, R. Greenaway-Mcgrevy, Peter C. B. Phillips
Research Collection School Of Economics
The decade following the global financial crisis (GFC) has witnessed rampant house price appreciation in many cities of the developed world. The metropolitan centres of New Zealand showcase this phenomenon with house price appreciation persistently outpacing income growth. In Auckland, the ratio of prevailing median house prices to median household income rose from 6.4 in 2010 to 10.0 in 2016 (Demographia, Citation2011, Citation2017), before declining to 8.6 by 2019 as house prices flat-lined while household incomes increased (Demographia, Citation2020). However, a strong resurgence in house prices during 2020 means that this ratio has resumed its upward trajectory, with an increase …
Housing Equity And Household Consumption In Retirement: Evidence From The Singapore Life Panel©, Lipeng Chen, Liang Jiang, Sock Yong Phang, Jun Yu
Housing Equity And Household Consumption In Retirement: Evidence From The Singapore Life Panel©, Lipeng Chen, Liang Jiang, Sock Yong Phang, Jun Yu
Research Collection School Of Economics
Housing affordability for elderly homeowners involves an entirely different set of issues as compared to housing affordability for first-time homeowners. To afford to ‘age-in-place’ may require homeowners to access channels that enable them to withdraw their housing equity to finance consumption in retirement. We utilize data from the Singapore Life Panel© survey to empirically investigate the impact of housing equity on the consumption of elderly households. Based on panel analysis, we find housing equity value has no significant impact on non-durable consumption for elderly people. The conclusion holds for a battery of robustness checks. Moreover, heterogeneity analyses based on subsamples …
Capital Controls And Macro-Prudential Housing Policies In Small Open Economies, Taojun Xie, Guay C. Lim, Hwee Kwan Chow
Capital Controls And Macro-Prudential Housing Policies In Small Open Economies, Taojun Xie, Guay C. Lim, Hwee Kwan Chow
Research Collection School Of Economics
We evaluate the effects of capital controls and macro-prudential policies in small open economies with a housing sector that is open to foreign ownership. The work is motivated by concerns that foreign investments also respond to housing investment opportunities resulting in potential house price inflation and issues about housing affordability. Our dynamic stochastic general equilibrium model features housing as an internationally traded investment. We also consider macro-prudential policies that are combinations of monetary and fiscal instruments. We investigate whether foreign investments in the housing markets are de-stabilising and whether there are appropriate policy responses to mitigate the negative effects of …
Housing Equity And Household Consumption In Retirement: Evidence From The Singapore Life Panel, Lipeng Chen, Liang Jiang, Sock Yong Phang, Jun Yu
Housing Equity And Household Consumption In Retirement: Evidence From The Singapore Life Panel, Lipeng Chen, Liang Jiang, Sock Yong Phang, Jun Yu
Research Collection School Of Economics
We utilize data from the Singapore Life Panel© survey to empirically investigate the impact of housing equity on consumption of elderly households. Based on panel analysis, we find housing equity value has no significant impact on non-durable consumption for elderly people. The conclusion holds for a battery of robustness check. Moreover, heterogeneity analyses based on subsamples by age of household head, house type, and number of property possessed also show no significant impact of housing equity on consumption in general. Finally, we use scenario analysis to study the Lease Buyback Scheme (LBS), a novel housing equity monetization scheme which allows …
Strategic Sequential Bidding For Government Land Auction Sales – Evidence From Singapore, Sumit Agarwal, Jing Li, Ernie Teo, Alan Cheong
Strategic Sequential Bidding For Government Land Auction Sales – Evidence From Singapore, Sumit Agarwal, Jing Li, Ernie Teo, Alan Cheong
Research Collection School Of Economics
This paper studies the extent to which equilibrium auction prices are pushed up sequentially due to strategic bidding behaviors in government land auction sales. Using a unique dataset that covers the universe of tendering prices submitted by all developers for all residential land auction sales in Singapore, we find that a tenderer’s bids are significantly higher where there was a previous land parcel sold within two years and located within four kilometers. The elevated price margin decreases with time and geographic distance. Tracking sequential bids submitted by same developers over time, we find that the incumbent winner of a previous …
Potential Crime Risk And Housing Market Responses, Seonghoon Kim, Kwan Ok Lee
Potential Crime Risk And Housing Market Responses, Seonghoon Kim, Kwan Ok Lee
Research Collection School Of Economics
We study how information on local (dis)amenities is transmitted and manifested in housing markets. Using nationwide data on multifamily homes in South Korea, we analyze heterogeneity in the effect of a sex offender's presence on sale prices and rents of nearby homes. Our results demonstrate that the price effect of the offender's move-in varies significantly by spatial context. People react more strongly and persistently to the move-in of the offender in places wherein indicators of social connectedness are stronger, such as places with relatively low population density. We also find that, unlike housing prices, rents do not change in response …
The Impact Of In-House Unnatural Death On Property Values: Evidence From Hong Kong, Zheng Chang, Jing Li
The Impact Of In-House Unnatural Death On Property Values: Evidence From Hong Kong, Zheng Chang, Jing Li
Research Collection School Of Economics
The occurrence of in-house unnatural death could negatively affect the value of housing property. This study evaluates the geographic and temporal scope of the impact of unnatural death on property values in Hong Kong. By exploiting the spatial and intertemporal variation of the shock in a difference-in-differences approach, we find significant negative externalities of unnatural death incidence on neighborhood housing values. On average, units in which an unnatural death occurred experience a 25% drop in value following the death. Nearby units on the same floor also show a significant price drop of 4.5%. Prices of units on other floors of …
The Impact Of The Cost Of Car Ownership On House Price Gradient In Singapore, Naqun Huang, Jing Li, Amanda Ross
The Impact Of The Cost Of Car Ownership On House Price Gradient In Singapore, Naqun Huang, Jing Li, Amanda Ross
Research Collection School Of Economics
This paper examines the extent to which a change in the cost of car ownership affects the house price gradient with respect to distance from the central business district (CBD). Theory suggests that if the cost of car ownership increases, then people will shift towards other modes of transportation, thus reducing house prices farther away from the CBD. However, the cost of car ownership is likely to be endogenous and correlated with various unobserved factors that also contribute to a change in the house price gradient. To obtain causal effects, we exploit a unique feature of Singapore’s car registration process. …
Determinants Of Urban Land Supply In China: How Do Political Factors Matter?, Wen-Tai Hsu, Xiaolu Li, Yang Tang, Jing Wu
Determinants Of Urban Land Supply In China: How Do Political Factors Matter?, Wen-Tai Hsu, Xiaolu Li, Yang Tang, Jing Wu
Research Collection School Of Economics
This paper explores two political factors for their potential effects on urban land supply in China: corruption, and competition for promotion. We find that standard urban economic predictions hold in the sense that both population and income increases are strongly significant determinants for the increase in urban land supply. Conditional on these demand-side factors, we find that the usage of two-stage auctions (as a proxy for corruption) is highly correlated with the increase in land supply. The corruption effects are strongest for commercial land, followed by residential land and then industrial land. To shed light on the competition motives among …
Determinants Of Urban Land Supply In People's Republic Of China: How Do Political Factors Matter?, Wen-Tai Hsu, Xiaolu Li, Yang Tang, Jing Wu
Determinants Of Urban Land Supply In People's Republic Of China: How Do Political Factors Matter?, Wen-Tai Hsu, Xiaolu Li, Yang Tang, Jing Wu
Research Collection School Of Economics
This paper explores whether and how corruption and competition-for-promotion motives affect urban land supply in the People's Republic of China. Conditional on demand-side factors, we find that corruption is highly correlated with an increase in land supply. The corruption effects are strongest for commercial land, followed by residential land, and then industrial land. To shed light on the competition motives among prefectural leaders, we examine how the number of years in office affects land supply and distinguish among different hypotheses. Our empirical results show robust rising trends in land sales. These results are consistent with the hypothesis that among prefectural …
Housing Policies In Singapore, Sock Yong Phang, Matthias Helble
Housing Policies In Singapore, Sock Yong Phang, Matthias Helble
Research Collection School Of Economics
Singapore has developed a unique housing system, with three-quarters of its housing stock built by the Housing & Development Board (HDB) and homeownership financed through Central Provident Fund (CPF) savings. As a result, the country’s homeownership rate of 90% is one of the highest among market economies. At different stages of its economic development, the Government of Singapore was faced with a different set of housing problems. An integrated land–housing supply and financing framework was established in the 1960s to solve the severe housing shortage. By the 1990s, the challenge was that of renewing aging estates and creating a market …
Are House Prices Driven By Capital Flows? Evidence From Singapore, Hwee Kwan Chow, Taojun Xie
Are House Prices Driven By Capital Flows? Evidence From Singapore, Hwee Kwan Chow, Taojun Xie
Research Collection School Of Economics
This paper investigates whether real house price appreciations can be attributed to the surge in real capital inflows into Singapore. We proxy capital flows by using the amount of foreign direct investments (FDI) to real estate capturing the foreign purchases of property in Singapore which we deflate by the private residential property price index. Notwithstanding the absence of a cointegrating relationship, our results support the hypothesis that lagged short term fluctuations in capital inflows are positively associated with the growth rates of house prices over the last decade. We also provide evidence that macroprudential measures implemented by Singapore reduced the …
New Methodology For Constructing Real Estate Price Indices Applied To The Singapore Residential Market, Liang Jiang, Peter C. B. Phillips, Jun Yu
New Methodology For Constructing Real Estate Price Indices Applied To The Singapore Residential Market, Liang Jiang, Peter C. B. Phillips, Jun Yu
Research Collection School Of Economics
This paper develops a new methodology for constructing a real estate price index that utilizes all transaction price information, encompassing both single-sales and repeat-sales. The method is less susceptible to specification error than standard hedonic methods and is not subject to the sample selection bias involved in indexes that rely only on repeat sales. The methodology employs a model design that uses a sale pairing process based on the individual building level, rather than the individual house level as is used in the repeat-sales method. The approach extends ideas from repeat-sales methodology in a way that accommodates much wider datasets. …
Cointegration Of Matched Home Purchases And Rental Price Indexes: Evidence From Singapore, Badi H. Baltagi, Jing Li
Cointegration Of Matched Home Purchases And Rental Price Indexes: Evidence From Singapore, Badi H. Baltagi, Jing Li
Research Collection School Of Economics
This paper exploits the homogeneity feature of the Singapore private residential condominium market and constructs matched home purchase price and rental price series using the repeated sales method. These matched series allow us to conduct time series analysis to examine the long-term present value relationship in the housing market. Three key findings are obtained. First, we fail to establish a cointegrating relationship between the home purchase price and rental price based on nationally estimated indexes. Second, area-specific indexes demonstrate strong cross-correlations, invalidating the use of first generation panel unit root tests that ignore these cross-correlations. Third, Pesaran's CIPS test indicates …
Singapore’S Housing Policies: Responding To The Challenges Of Economic Transitions, Sock Yong Phang
Singapore’S Housing Policies: Responding To The Challenges Of Economic Transitions, Sock Yong Phang
Research Collection School Of Economics
Singapore has developed its own unique state-driven housing system, with more than three quarters of its housing stock built by the Housing and Development Board and homeownership financed through Central Provident Fund savings. As a result, it has one of the highest homeownership rates amongst market economies. This paper provides a historical perspective of the main housing problems faced by successive prime ministers and their respective policy responses. Under the leadership of Prime Minister Lee Kuan Yew (1959-1990), the government established an integrated landhousing supply and housing finance framework to channel much needed resources into the housing sector to deal …
Home Prices And Inequality: Singapore Versus Other Global Superstar Cities, Sock Yong Phang
Home Prices And Inequality: Singapore Versus Other Global Superstar Cities, Sock Yong Phang
Research Collection School Of Economics
The Global City concept originates from the work of sociologist Saskia Sassen, which dates back to the 1980s. In an age of globalisation, division of labour is international in scope and production activities are distributed across the world. A global city is a significant point where the internationally oriented financial and producer services that make the global economy run choose to agglomerate.
A New Hedonic Regression For Real Estate Prices Applied To The Singapore Residential Market, Jiang Liang, Peter C. B. Phillips, Jun Yu
A New Hedonic Regression For Real Estate Prices Applied To The Singapore Residential Market, Jiang Liang, Peter C. B. Phillips, Jun Yu
Research Collection School Of Economics
This paper develops a new hedonic method for constructing a real estate price index that utilizes all transaction price information that encompasses both single-sale and repeat-sale properties. The new method is less prone to specification errors than standard hedonic methods and uses all available data. Like the Case-Shiller repeat-sales method, the new method has the advantage of being computationally efficient. In an empirical analysis of the methodology, we fit the model to all transaction prices for private residential property holdings in Singapore between Q1 1995 and Q2 2014, covering several periods of major price fluctuation and changes in government macro …
Further Evidence On The Spatio-Temporal Model Of House Prices In The United States, Badi H. Baltagi, Jing Li
Further Evidence On The Spatio-Temporal Model Of House Prices In The United States, Badi H. Baltagi, Jing Li
Research Collection School Of Economics
Holly, Pesaran, and Yamagata (Journal of Econometrics 2010; 158: 160–173) use a panel of 49 states over the period 1975–2003 to show that state-level real housing prices are driven by economic fundamentals, such as real per capita disposable income, as well as by common shocks, such as changes in interest rates, oil prices and technological change. They apply the common correlated effects estimator of Pesaran (Econometrica 2006; 74(4): 967–101), which takes into account spatial interactions that reflect both geographical proximity and unobserved common factors. This paper replicates their results using a panel of 381 metropolitan statistical areas observed over the …
Singapore's Housing Policies: 1960-2013, Sock Yong Phang, Kyunghwan Kim
Singapore's Housing Policies: 1960-2013, Sock Yong Phang, Kyunghwan Kim
Research Collection School Of Economics
The focus of this case study is on the important role of real estate and housing policies in Singapore’s economic development. In the sphere of housing policy, Singapore is known for its high homeownership rates, the very significant role played by the government in housing supply and housing finance, and the wealth that has been created and distributed in the process.