Private Housing Prices Research Articles

Exploring Differences in Trends Between Private and Subsidised Housing Prices in Hong Kong

As different classes of residential dwellings, government-subsidised Home Ownership Scheme (HOS) housing and unsubsidised private housing are aimed at adjacent groups of households on the housing ladder in Hong Kong. Subsidised housing is in high demand, and one important way of meeting it is to have better-endowed HOS families move up by buying into the private market. The paper explores the differences in price trends between these two classes of properties and attempts to find some of their determinants. Empirical analysis of historical prices of HOS and private housing reveals higher volatility in HOS prices and a differing trend with private market prices, as well as many more HOS transactions after the implementation of the White Form Secondary Market (WSM) Scheme.

주거복지 개선방안에 대한 법적 검토

A Buy-to-rent public housing is one of the types of public housing stipulated in “SPSPECIAL ACT ON PUBLIC HOUSING”, and the supply of public housing is a responsibility for the people of the state and local governments under “FRFRAMEWORK ACT ON RESIDENCE”. However, supplying such public housing requires considerable resources, and housing prices, which have already risen significantly due to years of rising private housing prices, also adversely affect the construction and supply of new housing. In this reality of housing supply, the president has been controversial by directly discussing the government's plan to purchase unsold private houses and supply them cheaply as public housing. In this paper, we examine whether the government's housing policy plan is an accurate policy under the current public housing related laws. In the theoretical sector, we examine the history of human rights and residential rights, and examine whether state intervention for legislative rights is possible under the “CONSTITATION OF THE REPUBLIC OF KOREA” ideology and system to check unilateral exercise of power through separation of powers such as executive power and executive power. In addition, the question of the legitimacy of the government's housing policy plan to unilaterally apply the policy on behalf of a specific area is reviewed through the Principle of Professionalism and equality established in “CONSTITATION OF THE REPUBLIC OF KOREA”. We examine whether the above government's public housing supply plan is feasible through a review of the budget related to public housing. In addition, we examine ‘a Jense frand’, which has recently become a big problem in the housing sector, and propose mandatory ‘registration of rights to release on a deposition basis’ and ‘registration of leasehold interest’ as a legal improvement.

주거복지 개선방안에 대한 법적 검토

A Buy-to-rent public housing is one of the types of public housing stipulated in “SPSPECIAL ACT ON PUBLIC HOUSING”, and the supply of public housing is a responsibility for the people of the state and local governments under “FRFRAMEWORK ACT ON RESIDENCE”. However, supplying such public housing requires considerable resources, and housing prices, which have already risen significantly due to years of rising private housing prices, also adversely affect the construction and supply of new housing. In this reality of housing supply, the president has been controversial by directly discussing the government's plan to purchase unsold private houses and supply them cheaply as public housing. In this paper, we examine whether the government's housing policy plan is an accurate policy under the current public housing related laws. In the theoretical sector, we examine the history of human rights and residential rights, and examine whether state intervention for legislative rights is possible under the “CONSTITATION OF THE REPUBLIC OF KOREA” ideology and system to check unilateral exercise of power through separation of powers such as executive power and executive power. In addition, the question of the legitimacy of the government's housing policy plan to unilaterally apply the policy on behalf of a specific area is reviewed through the Principle of Professionalism and equality established in “CONSTITATION OF THE REPUBLIC OF KOREA”. We examine whether the above government's public housing supply plan is feasible through a review of the budget related to public housing. In addition, we examine ‘a Jense frand’, which has recently become a big problem in the housing sector, and propose mandatory ‘registration of rights to release on a deposition basis’ and ‘registration of leasehold interest’ as a legal improvement.

Population Ageing, Asset Prices and Paying Ability: A Study Based on Urban Private Housing Prices in China

Population ageing and asset price issues, especially with regard to housing, exert a major impact on sustainable development. Since China entered the remit of an ageing society in 2001, the proportion of its elderly population has been rising. In the same period, the country’s real estate market experienced a rapid rise in house prices following the monetisation reform. Many large cities have experienced waiting lists for the purchase of private housing, and working-class groups not being able to afford it. This has become a social phenomenon in China. This study takes the social reality of China as the main research object, investigates the influencing mechanism of the ageing population structure on the residential commercial housing market, and locates paying ability, ageing, and private housing prices within the same framework. The study found that paying ability can be regarded as a regulating variable between ageing and private housing prices; consequently, a panel threshold effect model was constructed empirically to analyse the non-linear effects of ageing on private housing prices. The results show that when residents’ payment levels differ, the effect of ageing on the price of private housing also varies. Finally, by combining the 17-year panel data of 30 provinces and cities in China, it was found that all of the eastern regions of China crossed the threshold in 2010, and that all of the central and western regions crossed the threshold in 2011. At present, therefore, ageing can be said to be exerting an active impact on housing prices in China. To effectively curb the excessive rise in housing prices, the corresponding housing supply policy should be formulated from the perspective of improving the supply of housing to meet demand and the intergenerational transfer of the elderly population.

The Private Housing Market Cyclical Price Dynamics

Two types of heterogeneous investors (momentum and disposition) form a unique difference model to interpret housing price dynamics. Three parameters are crucial: auto-correlation, the rate of mean reversion and the contemporaneous adjustment towards long-term equilibrium price. For Singapore, we examine the dynamic structures that oscillate and/or diverge from equilibrium. Disposition investors predominate although the interaction between momentum and disposition investors acts as a key determinant of private housing price dynamics for a given time in a specific market. Key implication is that Singapore’s private housing market is low risk, offering stable returns owing to virtually no divergence even in the speculative 1990s. The best way to invest is to consider the momentum strategy and avoid the herd behavior for profit sustainability. For policy-makers, the Singapore private housing market is over-damped in the long run. Predominating disposition investors contribute to the market mechanism, which automatically adjusts private housing market prices. It is imperative to relax government intervention in Singapore’s private housing market to enhance its efficiency.

Decision Tree and Boosting Techniques in Artificial Intelligence Based Automated Valuation Models (AI-AVM)

This paper develops an artificial intelligence-based automated valuation model (AI-AVM) using the decision tree and the boosting techniques to predict residential property prices in Singapore. We use more than 300,000 property transaction data from Singapore’s private residential property market for the period from 1995 to 2017 for the training of the AI-AVM models. The two tree-based AI-AVM models show superior performance over the traditional multiple regression analysis (MRA) model when predicting the property prices. We also extend the application of the AI-AVM to more homogenous public housing prices in Singapore, and the predictive performance remains robust. The boosting AI-AVM models that allow for inter-dependence structure in the decision trees is the best model that explains more than 88% of the variance in both private and public housing prices and keep the prediction errors to less than 6% for HDB and 9% for the private market. When subject the AI-AVM to the out-of-sample forecasting using the 2017-2019 testing property sale samples, the prediction errors remain within a narrow range of between 5% and 9%.

Earthquakes, grants, and public expenditure: How municipalities respond to natural disasters

AbstractWe analyze the response of municipalities to the occurrence of natural disasters in terms of spending behavior, use of upper‐tier transfers and recovery, using balance sheet data of about 8,000 Italian municipalities for the period 2000–2015, and the universe of earthquakes events. We find evidence of increasing expenditure for about 12 years after the shocks, with asymmetric responses between earthquake‐related and unconditional grants, and heterogeneous flypaper effects across the country. While in northern municipalities expenditure tends to regress to pre‐earthquake levels, southern municipalities stick to higher expenditure levels when grants drop. This evidence is coupled with a faster recovery of private income and housing prices in northern municipalities.

When natives meet immigrants in public and private housing markets

Many countries provide inexpensive public housing to citizens and residents, whereas foreigners are only allowed to purchase relatively scarce and expensive private housing. Undoubtedly, the growth in native (foreign) population size will directly contribute to higher public (private) housing price, and indirectly induce higher private (public) housing price via general equilibrium effects. The question is how to quantitatively evaluate the magnitude of each impact. To address this issue, we propose a dynamic general equilibrium framework with heterogeneous native and foreign agents interacting in both public and private housing markets. Natives can upgrade from public to private housing over their lifetime. We also allow the option for foreigners to choose to obtain permanent residency and then compete with natives in the public housing market. We calibrate the model into the Singapore economy between 1993 and 2015. The model accounts for about 85.7% of private housing price growth and 46.2% of public housing growth in the data. The decomposition exercises suggest that native population growth can generate about 67.0% of private housing price growth, while the growth of the foreign population can generate about 7.05% of public housing price growth. Finally, when borrowing is not allowed, the demand for private housing decreases, and this pushes down the private housing price.

Public and private housing markets dynamics in Singapore: The role of fundamentals

Singapore housing market features a sizable public sector and a non-negligible private sector. This paper examines the interactions between these two sectors and the contributions of economic fundamentals, including demographics, financial constraints and land supply, to both public and private housing prices growth. We construct a dynamic general equilibrium model capturing the main demographic characteristics and housing market arrangements in Singapore, where residents can choose between public and private housing while nonresidents only have access to the private housing. We find that economic fundamentals can account for about 47.6% of the public housing price growth from 1990 to 2015 and 81.3% of the private housing price growth from 1980 to 2015, in which demographics have contributed the most, accounting for about 60.8 and 73.2% to the public and private housing prices increase, respectively.

Explaining Housing Market Dynamics within a Dynamic Factor Approach: Economic Interpretation and Estimation

The economic interpretation and model estimation of housing market dynamics in this study provide meaningful insights by focusing on housing assets and housing market illiquidity. The resulting generalized dynamic factor model enables us to capture unobservable forces such as expectation, uncertainty, and transaction cost to estimate housing market dynamics and time series variations in private housing prices. The empirical results support the existence of two common factors underlying Singapore's private housing market dynamics between 1988 and 2007. The private housing market-wide series, which is highly related to financial conditions, exhibits a high degree of commonality, and the explanatory power of the time series variation is higher when private housing prices are more volatile.

Structural Change Modeling of Singapore Private Housing Price in Simultaneous Equation Model

This paper investigates the structural change behavior of Singapore’s private housing market and in particular the impact of government policies on housing price determination. A structural model of price is established and the “Regressive Segmentation (RS)” method is applied to detect the changing points without prior knowledge of the structural changes. Our study shows that the changing points indicated by the RS method are consistent with the timing of the policy changes.

Private space, shared space and private housing prices in Hong Kong: An exploratory study

This exploratory study examines the relationship between internal space, shared space and private housing prices. Housing floor area is an ambiguous concept in Hong Kong because it covers a possible exaggeration of the amount of ‘private space’ exclusively enjoyed by the owner and an unidentifiable portion of ‘public space’ shared with other owners within the development. Using hedonic pricing models, this study has found that different distributions between private and shared space command different values from the housing buyers. Shared communal space generally exerts a downward pressure on housing prices. The buyers are willing to pay more for the private space and some desirable forms of communal space. A higher willingness-to-pay for the desirable attributes such as clubhouse indicates that the Hong Kong people are increasingly concerned about the quality of living space in the built environment. This study suggests a need of further research into the exact measurement and the different forms of housing space rather than simply taking the stated floor space figures for granted.

The Impact of Supply of Subsidized Sale Flats on Private Housing Prices in Hong Kong

This paper investigates the impact of supply of subsidized sale flats on private housing prices in Hong Kong, and their cause-and-effect relationships. Using quarterly data for 1978-2003, the results show that private property prices move independently of the supply of subsidized sale flats and that such supply does not “Granger cause” private housing prices. The study also found evidence that the cessation has not restored the market or resulted in any increase in housing prices. The demand or prices in the private sector is not influenced by the implementation of the moratorium nor does the production and sale of subsidized sale flats pose a direct threat to the private sector in Hong Kong. Finally, the regression analysis shows that the stock of private domestic accommodation, transaction volume of private residential flats, household income, and unemployment rate are important in explaining property market behavior.

Price dynamics in public and private housing markets in Singapore

In down-payment constrained housing consumption models, increases in house prices could trigger household mobility decisions in housing markets. This study empirically tests house price dynamics associated with the mobility of households in the public resale and private housing markets in Singapore. The results show that stochastic permanent breaks were found in the public housing resale prices and private housing prices. The relative prices drift apart occasionally, but mean-revert to a long-run fundamental equilibrium. Error correction mechanisms and lagged public housing prices were also found to have significant explanatory effects for price changes in the private housing markets. The results support the hypothesis that household mobility creates co-movements of prices in public and private housing submarkets in the long run.

An empirical analysis of Singapore households’ upgrading mobility behaviour: from public homeownership to private homeownership

In contrast to international experiences, Singapore observes a special type of housing related mobility where its public homeowners continually seek to upgrade to private housing. Empirical results have shown that the rising trend of such social mobility has significantly contributed to the volatility of private housing prices. This paper is aimed at analysing why the public homeowners in Singapore prefer to upgrade to private housing. Using a housing choice model with logit regression, the analysis throws light on what determines public homeowners’ upgrading behaviour and what are the wider consequences of such behaviour.

The Dynamics of the Singapore Private Housing Market

In this paper, a dynamic stock flow model is modified and applied to the Singapore private housing market. Two empirical models are then constructed, which offer an explanation for the dynamic patterns of both real private housing prices and new housing construction. In the long run, movements in the real GDP per capita and the total housing stock are found to have significant impacts on real housing prices, while the user cost, the public resale housing prices and the autocorrelation of housing prices with one lag explain most of the short-run dynamics of real housing prices. On the supply side, the long-run price elasticity of new housing construction is 1.31. It is also found that long-run new housing construction drops 6.5 per cent for every 1 per cent increase in the total housing stock.

The Macro Impacts of Public Resold Dwellings on Private Housing Prices in Singapore

In Singapore, the public resale housing market is an actively traded public owner occupier housing market succeeding to the heavily regulated new public owner occupier housing sector, in which the new public housing units are sold at a heavily subsidized price. The resale market was originally aimed at facilitating consumer housing choices and harnessing the greater efficiency of market mechanism in the delivery of public housing. However, it also became a vehicle for many Singaporeans to upgrade to private housing. This raises the concerns of its impacts on the private housing market as well as the equitable distribution of public resources. This paper first analytically reviews the retrospect of Singapore housing system, then empirically studies the impacts of public resold dwellings on the private housing prices, probing the links between the public resale market and the private housing market as well as the implications on the equitable distribution of public resources.

Prepayment Risk of Public Housing Mortgages

Executive Summary. This paper examines the determinants of prepayment risk of mortgages for Singapore public housing, which are adjustable rate mortgages. An understanding of the prepayment risk of mortgages is important because prepayments affect investor return from investing in mortgage-backed securities. The findings show that prepayment is positively related to market sentiments and the interest rate of public mortgages. Conversely, it is negatively related to income growth and the relative difference between private and public housing prices. The findings further imply that the prepayment rate of public mortgages is directly affected by any policies that enhance the affordability of residents of public housing to move to private housing.

International Real Estate Review

In Singapore, the public resale housing market is an active second-hand housing market, whereby previously subsidised new public housing units were being transacted at market prices. In contrast to the private housing price determinants that have been identified in the international literature, the prices of public resale housing in Singapore are largely determined by public policies rather than by economic variables. This paper provides some empirical evidence on how and to what degree public housing policies affected the price dynamics of public resale housing in Singapore during the 1990s. The findings have additional implications of the wider consequences of public policies on the prices of private housing units.

Rational expectations and market fundamentals

This paper uses an econometric approach to examine the relationship between real ( ex post) and rationally expected housing prices in Hong Kong over its boom and bust cycle. Models of market fundamentals are developed from a rational expectation hypothesis to compare the ex post housing prices and expected housing prices, and to test whether the housing price can reflect the market fundamentals. The findings suggest that the private housing price in Hong Kong is cointegrated to the market fundamentals in the long‐runP only; and exhibits a volatile performance in the short‐run. The short‐term market “noises” are believed largely to be the result of government intervention and unexpected market fluctuations.