A study by MAS shows property prices are kept in check by adjusting the volumes of new and resale homes.
A new study released by the Monetary Authority of Singapore (MAS) reveals that theSingapore’s housing cycle has a longer duration, and does not synchronise or has any correlation with the overall business cycle. This was attributed to the occasional public construction projects that the Government implements to boost the economy during periods of weak growth.
However, property price adjustments can also be affected by other factors such as a mismatch of price expectations between buyers and sellers, high transaction prices and infrequent trades, therefore resulting in larger adjustments in sales volumes relative to price movements.
In addition, these larger changes in sales volumes during an upswing or downswing of a property market reflect the role of developers in managing their inventories over the property cycle. For instance, developers usually hold back on releasing new units during periods of property downswing to maximise profit margins.
For more information, please visit The Straits Times.
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