Resale flat prices respond principally to swings in new-flat supply rather than to general economic conditions
A worked RES examination question on hdb resale index and policy, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
Over the eighteen months to March 2026 the supply of new public-housing flats offered for application was reduced and waiting times lengthened. Resale flat prices in the estate rose over the same period, although economic growth was flat.
Which statement most appropriately explains the rise?
The answer, and why
Answer: C
The rule. Resale flat prices respond principally to swings in new-flat supply rather than to general economic conditions.
Why C is correct. Reduced supply and longer waits push demand into the resale market, which explains rising resale prices against flat growth.
The other options.
- A asserts a tracking relationship with growth the facts contradict.
- B treats resale prices as administratively set.
- D attributes the rise to the March cooling measures, which post-date most of the eighteen-month period and would in any event push the other way.
Exam note. Check the dates. A cause announced in March cannot explain a rise running from the previous year.
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