RES exam question on Real Estate Market: one is NOT a demand-side factor
At a briefing for new salespersons, Dr Wong, an economist, lists four changes that could move private home prices in Singapore over the next two years. She asks the class to sort them into demand-side and supply-side factors. Which one is NOT a demand-side factor?
- AFaster household formation as more young adults marry and set up homes of their own
- BA fall in mortgage rates that lowers the monthly cost of servicing a housing loan
- CStronger expectations of capital gain among buyers after several quarters of rising prices
- DAn increase in the number of sites released under the Government Land Sales programme
Show answer & explanation
Answer
D. An increase in the number of sites released under the Government Land Sales programme
Explanation
Answer: More Government Land Sales sites is not demand-side. Releasing land acts on how many homes can be built, so it is a supply factor.Rule: Demand comes from income and employment, population and household formation, interest rates and loan availability, sentiment and expected gains, and government cooling or easing measures. Supply comes from the existing stock, the Government Land Sales programme, collective sales, the construction pipeline and plot ratios.Source: RESPrep /learn/real-estate-market-and-government-intervention, current at 1 Oct 2026
Why the other options are wrong
- Faster household formation: Household formation adds to how many buyers want homes, so it acts on demand.
- Lower mortgage rates: Cheaper mortgages change what buyers can pay each month, so they act on demand.
- Expectations of capital gain: Sentiment and expected gains drive how many buyers want homes and what they will pay.
Study the concept behind this question: The Property Market & Government Intervention (Singapore)
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