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Article: Demand Restrictions and Asymmetric Risk Behaviors Author: Mi Diao, Yi Fan, Tien Foo Sing Start Page: 131 Abstract: The government of Singapore imposed two rounds of demand restrictions in 2010 and 2013, respectively, which prohibited private housing owners from concurrently owning both a private housing unit and a public housing flat. These restrictions curb speculative and investment activities, but do not deter public housing owners from upgrading to private housing. Using private housing transaction data between 2005 and 2015, we find that the demand shocks in 2010 and 2013 caused a significant reduction of 2.4% and 1.8% in the transaction prices of investors relative to those of the owners, respectively, ceteris paribus. Larger price declines are observed in investment sales in the submarkets, such as the core central region, and resale, moderate-to-high end, and large unit markets. The results show that when the housing market is volatile, risk averse investors are found, and owners move up the "quality" curve by upgrading their home. Keywords Demand Restrictions, Risk Aversion, Government Intervention, Private Housing Market, Investors and Owner All articles listed here are available for download in portable document format (PDF). |
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