Singapore takes new steps to cool housing market
Will this really cool the housing market? What do we really mean when we say "cool the housing market"? Is it to arrest the rise in prices? Is it to reduce the number of transactions? Or is it to bring down the prices of housing?
The new measures are likely to achieve all these. By restricting the entry of buyers into the market (because the barrier to entry is now much higher), demand is being driven back. With a fixed short run supply, this means a drop in housing prices in the short run as well as less transactions. Simple demand-supply theory.
Let's see how this turns out.
Will this really cool the housing market? What do we really mean when we say "cool the housing market"? Is it to arrest the rise in prices? Is it to reduce the number of transactions? Or is it to bring down the prices of housing?
The new measures are likely to achieve all these. By restricting the entry of buyers into the market (because the barrier to entry is now much higher), demand is being driven back. With a fixed short run supply, this means a drop in housing prices in the short run as well as less transactions. Simple demand-supply theory.
Let's see how this turns out.
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