RES exam question on Real Estate Market: A salesperson assesses the property market
A salesperson assesses the property market. URA publishes a quarterly Private Residential Property Price Index, a large supply pipeline of completed units is due, and interest rates are rising. Which is/are correct? (i) The URA Price Index is a key indicator of private residential price trends (ii) A large incoming supply, all else equal, tends to moderate price/rental growth (iii) Rising interest rates raise borrowing costs and can dampen demand (iv) The property market is wholly unaffected by interest-rate movements
- A(i), (iii) and (iv) only
- B(i) only
- C(ii) and (iii) only
- D(i), (ii) and (iii) only
Show answer & explanation
Answer
D. (i), (ii) and (iii) only
Explanation
(i) is correct: URA's quarterly Private Residential Property Price Index is a key indicator of private price trends. (ii) is correct: a large incoming supply, all else equal, tends to moderate price and rental growth. (iii) is correct: rising interest rates raise borrowing costs and can dampen demand.
Why the other options are wrong
- (iv) is wrong: the market is materially affected by interest-rate movements through affordability, so the answer is (i), (ii) and (iii) only.
Study the concept behind this question: The Property Market & Government Intervention (Singapore)
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