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The Impact of Supply and Demand on the Housing Market in
Singapore |
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Despite the ongoing COVID-19 pandemic, the housing market in Singapore remains
in a healthy state, according to the Global Property Guide in 2021. However, the
delay of the Housing Board in reselling flats has created an increased demand
that has led to a significant rise in housing prices, affecting the short and
long-term supply of flats available in the market. This essay aims to explain
how the increased demand has affected the supply of housing in Singapore with
the aid of a housing market diagram.
The law of demand states that as the price of a good or service decreases,
consumers tend to demand or purchase more of it. This is reflected in the demand
curve. When the demand for housing increases, the price of flats tends to
decrease, and this encourages more people to enter the market, leading to an
increase in the quantity of flats available for purchase.
Similarly, the supply curve slopes upward as the price increases, indicating
that as the price of flats increases, more firms are encouraged to produce more
flats for sale. The quantity of flats supplied is affected by the demand, and
when the demand for flats increases, more firms are attracted to the market,
leading to an increase in the quantity supplied.
However, it is important to note that the delay in reselling flats by the
Housing Board has resulted in an imbalance in the market, with demand
outstripping supply. This has led to an increase in housing prices, making it
difficult for some people to afford to purchase a home.
To address this issue, the government of Singapore has implemented various
measures to increase the supply of housing. For example, they have encouraged
the development of new housing estates, increased the supply of Build-To-Order (BTO)
flats, and introduced policies to encourage more Singaporeans to live in
non-mature estates.
In conclusion, the housing market in Singapore has remained healthy despite the
challenges posed by the COVID-19 pandemic. However, the increased demand for
housing due to the delay in reselling flats has resulted in a rise in housing
prices, affecting the short and long-term supply of flats available in the
market. The government of Singapore has taken steps to address this issue by
increasing the supply of housing through various measures, but more needs to be
done to ensure that everyone has access to affordable housing. |
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