Real Estate Economics Research Paper

Real Estate Economics

Real Estate economics is a form of urban economics which is a branch from microeconomics.
Urban economics looks into the issues of everyday life like crime, public transport, education and housing.

The suppliers in the housing market would be the developers, renovators and owners, while the consumers would be the homeowners, renters and owners as well. Owners are both suppliers and consumers, as they purchase properties and resell it for a profit. The transaction between supplier and consumers is a long process which requires both time and money since the transactions are usually big. Agents are required to smoothen and assist in the transaction. These agents are usually property agents and the bank itself.

Properties

The bubble will keep growing until it reaches a price where nobody will bid higher. The bubble will burst when there is a huge sale of houses at a price significantly lower than the price of the property sold on the market. Hence it will become a downward trend that will lead to the bubble bursting. Property prices will keep dropping till it reaches its intrinsic value.

Singapore’s housing policy focus on 2 areas, the private and public sectors. The public sector is catered to the needs of majority of the population to provide housing at affordable prices. Examples of such houses are flats provided by the Housing Development Board(HDB). Private housing would be for owners and treated as a luxury, examples would be condominiums and landed properties.

Singapore’s policy of public housing is to provide ownership over a house to promote a sense of belonging to the country. The policies on purchasing a flat would require that at least the applicant is a Singaporean. This is to promote citizenship for owners of flats. The allocation of flats follow a balloting system, where applicants apply for a flat and the computer system will choose applicants based on their priority and eligibility in rounds. successful applicants will be informed on their status of their

They do not require a permit only for non-condominium units which refers to HUDC houses or condominiums developed that are approved under the planning act. http://www.ires.nus.edu.sg/workingpapers/IRES2012-031.pdf In the recent years, prices have risen at an alarming rate which is foreseen to be a bubble that is being inflated. The Singapore government took action to cool off the rising price of houses.

Lending becomes tighter, monthly payments can’t exceed more than 60% of income. Loan durations are reduced to 30 years from 60 years and both owners and co-owners(joint-owners) have to be borrowers to ensure the debt would not be only on a single owner. By restricting the loans, home buyers would face difficulty raising funds to buy houses for speculation.

The buying stamps for both sellers and buyers are raised to 16% and 10% respectively. The tax on reselling property is higher, making it difficult to profit from creating an arbitrage from buying homes and reselling them at a higher price to foreigners seeking homes in