The dynamics of the Singapore commercial property market

This paper assesses the cointegration characteristics of commercial property prices, property stock prices, gross domestic product (financial and business services/ commerce), interest rates and supply of commercial space in the Singapore economy over the period 1980–1997. The primary motivation is to provide useful insights into the long-term and short-run dynamics of commercial property market in the presence of stock market conditions and macroeconomic influences. Our evidence suggests that commercial property market is linked to the property stock market and macroeconomic conditions in the long run, and that about 0.10 of the deviations between the actual and the equilibrium value of commercial property price is corrected in each quarter.