Publication Type

Journal Article

Version

submittedVersion

Publication Date

11-2020

Abstract

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 by the health condition, the age of household head, the house type, and the number of properties owned also show no significant impact of housing equity on consumption. Finally, we use scenario analysis to study the Lease Buyback Scheme (LBS), a novel housing equity monetization scheme that allows elderly households to unlock housing equity for retirement financing. An individual scenario analysis reveals positive but negligible effects, which may explain the low take-up rate for the LBS.

Keywords

Housing wealth, elderly households, housing equity withdrawal, Singapore

Discipline

Asian Studies | Behavioral Economics | Public Economics | Real Estate

Research Areas

Applied Microeconomics

Publication

New Zealand Economic Papers

Volume

55

Issue

1

First Page

124

Last Page

140

ISSN

0077-9954

Identifier

10.1080/00779954.2020.1842794

Publisher

Taylor & Francis (Routledge): SSH Titles

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1080/00779954.2020.1842794

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