ABSTRACT
Even though there would probably be some merit in the notion that land scarcity in Singapore (approx. 640 sq km in total land area) ultimately leads to an upward trend in property prices over the long term, the dynamics of short-term demand and supply conditions could induce marked or considerable volatility in prices—which was evident from the behavior of the Singapore property market, on the whole, during the current decade. In the early to mid-1990s, high economic growth, low interest rates, easy availability of credit, and Singaporeans’ own penchant for home ownership, home upgrading, and wealth building have fueled the rapid appreciation of private housing prices in Singapore. Between January 1992 and June 1996, average private housing prices surged some 160 percent, roughly equal to an indicative compound annual growth rate of about 20 percent. Housing property development became a core business activity of many, even traditionally nonproperty companies.
