Price or Rent, That Is the Question

We utilize a novel method from Phillips, Shi and Yu (2013) to investigate whether Singaporean real estate markets have experienced bubbles. This method involves a doubly recursive right tailed unit root test which can be used for real time policy decisions. We fi nd that the Singaporean real estate markets were subjected to explosive growth (where fundamental rental grew at a higher rate than property prices) during the Global Financial Crisis. We also found two specifi c segments lead the Singaporean residential housing markets and commercial markets. Additionally, it is found that these two leading sectors affected the growth of other markets positively in normal periods and negatively during the Global Financial Crisis