Evaluating Singapore’s Housing Policies: A Bounds Testing Approach

Publication Type

Conference Paper

Publication Date



The Singapore housing market is unusual in the dominance of privately-owned government-built housing coexisting with openness to foreign investments in the private housing sector. Recent rapid population increases in a low interest rate and high global liquidity environment has resulted in accelerated house prices increases in Singapore. The Singapore government responded with several consecutive rounds of measures to stabilize housing prices. This provides a unique opportunity to study the degree of success of various government measures to maintain house price stability. In this paper, we first construct a set of indices for the government‘s cumulative efforts in stabilizing the housing market, following Zhang and Zoli (2014) and based on the government policy statements from June 1981 to December 2013. We then test for cointegrating relationships between the housing policies vis-à-vis property price, transaction volume and sales value using Pesaran (2001) bounds test for cointegration. Our findings are as follows. First, Singapore‘s housing policy has significant counter-cyclical impacts on property transaction volume and sales values in both the long-run and the short-run. Second, cooling measures initiated in September 2009 have been effective at least in the short-run horizon. Third, different types of housing policy have different effectiveness: debt-to-income ratio measures are effective in the long-run, while capital gain tax, loan-to-value ratio and Central Provident Fund measures are effective in the short-run horizon.


Asian Studies | Finance and Financial Management | Real Estate

Research Areas

Quantitative Finance


Singapore Economic Review Conference, August 5-7

City or Country


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