No abstract

Regression models are used to show that interest rates, income growth rates and the supply of housing have not played a statistically significant role in the determination of private housing prices in Singapore between 1975 and 1994. Instead, private housing prices in Singapore were highly correlated with the prices for public-sector-built housing. Moreover, the timing of government policies relating to the use of compulsory savings for private housing finance purposes, the liberalisation of rules on public housing ownership criterion as well as for housing finance had a significant impact on private housing prices.

No abstract

Using data from Singapore, we find no evidence that house price increases have produced either wealth or collateral enhancement effects on aggregate consumption. We confirm the presence of liquidity constraints from the asymmetric reaction of consumption to income increases vis-a-vis income declines. When we allow for asymmetric response, anticipated house price increases do not have a positive effect on aggregate consumption: we find that they are considerably more likely to have a modest dampening effect, although this negative result is not statistically significant from zero. Declines in expected house price growth have a larger and marginally significant negative effect on consumption. We conclude that the results of recent studies of OECD countries, which find changes in housing wealth to be positively associated with changes in aggregate consumption, cannot be generalized to the Singapore case.

No abstract