Economics Extended Essay

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How has the economic contraction in Singapore affected the country’s non-landed private residential property prices during the last 2 quarters of 2008? ____________________________________________________________________________________________________

International Baccalaureate Diploma Programme
Extended Essay Economics

How has the economic contraction in Singapore affected the country’s non-landed private residential property prices during the last 2 quarters of 2008?

Word Count: 3995

By: School: ACS (International) Year: 2009

International Baccalaureate - Extended Essay

1

How has the economic contraction in Singapore affected the country’s non-landed private residential property prices during the last 2 quarters of 2008? ____________________________________________________________________________________________________

Abstract

For my extended essay, I chose to investigate the relationship between the Singapore’s economic contraction and the decline of the country’s property market. Hence, my research question is: How has the economic contraction in Singapore affected the country’s non-landed private residential property prices during the last 2 quarters of 2008? In order to answer this question, I have divided my investigation into two main parts – firstly, to establish links between the economic contraction in Singapore and non-landed private residential property prices and then, to investigate the varying impact on non-landed private residential property in different regions of Singapore. My investigation incorporates both primary and secondary research. My primary research is an interview with an experienced property agent, while my secondary research consists of statistics provided by the government, news articles, property reports and records of property transactions. My primary research has given me a much better understanding of the property market as well as consumer mentality. My secondary research on the other hand, provides me with the facts and figures I need to back up my analysis. In conclusion, I found five factors causing the falling property prices – unemployment, stringent loans from banks, fall in rentals, low market sentiment, and decrease in new launches. I am also able to determine a general trend that non-landed private residential properties in the core central region which I have indentified as luxury goods, are prone to larger price falls than those in the rest of central region, most of which are normal goods, while properties of some districts outside of the central region can be labeled as inferior goods (since demand for them increase as prices fall). However, as I discovered in my research process, this is hardly a rule of thumb and there are plenty of exceptions.

(296 words)

International Baccalaureate - Extended Essay

2

How has the economic contraction in Singapore affected the country’s non-landed private residential property prices during the last 2 quarters of 2008? ____________________________________________________________________________________________________

Contents Page

Title Page

Page 1

Abstract

Page 2

Contents Page

Page 3

Introduction

Page 4

Chapter 1: Links between the economic contraction in Singapore and non-landed private residential property prices Page 7

Chapter 2: Impact on properties of various localities
Page 18

Conclusion

Page 28

Bibliography

Page 30

Appendix

Page 32

International Baccalaureate - Extended Essay

3

How has the economic contraction in Singapore affected the country’s non-landed private residential property prices during the last 2 quarters of 2008? ____________________________________________________________________________________________________

Introduction

The property market in Singapore reached historical peaks in 2007. Property prices kept rising and many investors were “flipping” properties for profit, which is in other words,...
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