The role of speculation on housing price disparities

Naqun Huang, Hao Li and Yanmin Yang

International Review of Economics & Finance, 2024, vol. 96, issue PA

Abstract: This paper explores the impact of speculation on disparities in home purchase prices within neighborhoods. Using administrative data on residential real estate transactions in Singapore's private housing market, our analysis reveals that housing unit prices increase over time within a neighborhood in the presence of speculators. However, this pattern remains stable after the implementation of macroprudential policies aimed at deterring speculation. Our mechanism analysis indicates that while speculative sales contribute to the increase in the price of neighboring units over time, speculative purchases have negligible effects. These findings underscore the potential of macroprudential policies in mitigating speculation and promoting housing affordability.

Keywords: Housing prices; Neighborhood; Sales sequence; Speculator; Property under construction (search for similar items in EconPapers)
JEL-codes: H20 R30 R38 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:96:y:2024:i:pa:s1059056024006142

DOI: 10.1016/j.iref.2024.103622

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