The price-rent dynamics and linkage of urban housing: evidence from Singapore

Purpose The aim of this paper is to examine dynamic linkages between price and rent and between property types. Intuition suggests that housing market segments experience different market cycles in response to macroeconomic shocks. However, they may be dynamically interlinked in urban areas because of substitutability. The linkage may even change, if preference weakens for multiple occupancies. A sudden reduction in apartment demand may create repercussions to other housing segments. Past analyses, despite their contributions, are static and do not consider possible linkages between property types. To fill this void, this paper investigates the price-rent dynamics for urban homes by adopting the case of Singapore. Design/methodology/approach This paper applies a methodology from Phillips et al. (2015) to Singaporean housing (price and rent) data. Phillips et al. (2015) recently proposed a test for an explosive root in time series data and has spurred several empirical applications in the bubble literature. Findings This paper finds for Singapore that the markets were subjected to explosive growth (where rents grew at a higher rate than prices did) during the Global Financial Crisis. Also, the results suggest that rent drives price and that non-landed housing (offices in central areas) leads to other residential housing (non-residential housing) in both price and rent. Practical implications Overall, the present findings suggest that rent drives price, while property types are interlinked. Non-landed homes and offices in central areas are the sources of repercussions. Under normal circumstances, rental shocks may be propagated positively from nonlanded housing (central offices) to the other residential (non-residential) property types as the present findings suggest, which enables us to infer that a decrease in non-landed housing (central offices) rent may lead to an increase in rent on other property types because pandemic shocks only shift demand fromone property type to another, unlike typical macroeconomic shocks. Originality/value Urban homes are faced with uncertainty arising from the COVID-19 outbreak for which city residents have a stronger incentive to exile to suburbs. Urban life may no longer be attractive because of social distancing and work from home policy. This has implications for urban home demands that are closely linked to urban house price and rent. In the present study, the paper set out to investigate the price-rent and property-type dynamics for urban homes in Singapore.

Considering unemployment in Ecuador during the Great Depression

The Great Depression struck Latin America through the commerce: the reduction in revenues from the external commerce spread to the rest of the economy, resulting in the continue decreasing of the monetary supply. The Ecuadorian monetary policy until 1932, based on the gold standard, faced the phenomenon of deflation, which caused real salaries to grow. Since 1932, the monetary supply increased due to the abandonment of the gold standard, which caused real wages to decreased. In the same period, from 1928 to 1935, the primary data of the central offices of eight institutions shows that public employment decreased abruptly from 1928 to 1930, from 109.4 to 83.1 points (1927=100). After 1930, there was a quick recovery until 1932, and, from this point in time, it remained relatively stable until 1935. This article constructs, for the first time in the Ecuadorian historiography, an employment index which serves to see employment as the adjustment variable of the Great Depression.