Munich Personal RePEc Archive

Does income or house price lead in the public housing market? a case study of Singapore’s public housing sector.

Razak, Nursakina and Masih, Mansur (2018): Does income or house price lead in the public housing market? a case study of Singapore’s public housing sector.

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Abstract

The purpose of this study is to find the Granger-causal relationship between house price and income. Singapore is taken as a case study and standard time-series approach is employed. The outcome of this relationship will determine the lead-lag relation between house price and income which will then provide some policy implications to tackle the rising housing price and income distribution as well as housing affordability in Singapore. However, the empirical findings based on the generalised VDC (forecast variance decompositions) tend to indicate that unemployment rate is the most lagging factor, while house price is the most leading variable followed by the income variable. This happens due to the probability that house price is controlled and determined by HDB (Housing Development Board), the government entity for public housing in Singapore. This has strong policy implications.

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