Perceptions of housing accessibility and its impact on public sentiment
Moving beyond traditional macroeconomic metrics, Chua and Zhang (2026) discuss how an ingrained "attainability benchmark" shapes public response to real estate trends, highlighting a distinct asymmetry in how citizens process good versus bad news.
29 June 2026
For the vast majority of households, a home represents the single largest asset and primary vehicle for long-term wealth preservation. Beyond financial security, housing equity is also an ample source of leverage that allows owners to access credit and capital to facilitate other investments or fund life goals.
In Singapore, home equity makes up a substantial 50% of average household wealth, and hence, perceptions of the housing market can profoundly affect wider socioeconomic notions of mobility, equality, and institutional trust. Hitherto, the literature has predominantly focused on objectively measurable variables – such as asset value appreciation, the housing wealth effect and its concomitant impact on consumption behaviours.
In their working paper “Housing Markets and the Belief in Opportunity”, Chua and Zhang, however, pivot away from these objective metrics to empirically measure how housing market dynamics shape the subjective beliefs of Singaporeans concerning intergenerational mobility and the long-term prospects of their children. Through a randomised informational experiment, their study offers insights into the psychology behind homeowners here, and how they respond to shifting affordability constraints, state interventions, and the perceived fairness of the broader economic landscape.
Rational market expectations vs rigid subjective beliefs
For their study, Chua and Zhang deployed a randomised, “single-wave” informational survey experiment designed to establish clear causal relationships rather than mere correlational observations.
A representative sample of Singapore homeowners was divided into a baseline control group and four distinct treatment groups, which were respectively exposed to treatments T1 to T4, namely: (T1) data detailing escalating prices in the HDB resale market, (T2) data indicating a softening or cooling of HDB resale market prices, (T3) information highlighting expanded state housing subsidies, and (T4) regulatory information regarding increased property tax rates. The HDB resale segment was chosen for the study because, in contrast to the highly regulated BTO sector, resale flats are largely subject to the price mechanism of the open market.
By measuring how these distinct groups updated their subjective sentiments relative to the control baseline, the authors were able to capture a precise, unconfounded snapshot of the population's psychological response to changes in the housing landscape.
Findings
The findings uncovered a striking asymmetry between how respondents responded to market economics and how they updated their long-term societal outlooks.
Homeowners exposed to data showing shifting HDB resale prices updated their short-term market expectations with logical consistency. For example, those exposed to data showing escalating prices (T1) revised their short-term property price growth forecasts upwards by 0.884 percentage points more than the control group, whereas those exposed to softening price trends (T2) adjusted their forecasts downwards by 1.456 percentage points relative to the control group. These projections deviated from the control group with high statistical significance, thereby firmly establishing a causal relationship between the provision of market information and the updating of economic expectations.
Though the respondents’ economic adjustments appeared rational, this symmetry collapsed when it came to their long-term societal beliefs. While witnessing an overheated housing market triggered a severe contraction in mobility optimism, exposure to softening trends or favourable policy interventions resulted in a stubborn psychological inertia.
Specifically, when told that property prices were escalating (T1), respondents became significantly more pessimistic about the future and their children’s social mobility. The researchers estimated that the drop in confidence was approximately equivalent to 12% of the pre-shock gap between the perceived mobility prospects of children from high-income versus low-income families.
Interestingly, this bleak outlook was highly persistent. When other groups were shown data on a cooling market (T2) or expanded state subsidies (T3), changes in sentiment were insignificant and statistically indistinguishable from zero – in other words, the respondents took bad news hard but remained indifferent to good news.
The logic of economic theory would predict a rational process where positive and negative information shocks move long-term expectations with equal, corresponding weight. Hence, this finding of an asymmetrical response to good and bad news is nontrivial.
This asymmetry also extended directly into public confidence in the government, presenting a distinct "lose-lose" dynamic for the state. Exposure to rising housing price information (T1) reduced trust in government by 0.088 points on a 1-to-5 scale. Even more strikingly, learning about increased property taxes (T4) suppressed institutional trust by a severe 0.130 points, a result highly statistically significant at the 1% level.
Explanation – the attainability benchmark
To account for this one-sided reaction, the study introduced the concept of an "attainability benchmark" that shapes public interpretation. Rather than processing real estate metrics in a vacuum, homeowners assess any new data against a baseline standard of housing security that they deem essential for upward social mobility.
This benchmark extends substantially beyond the nominal price of a property to also encompass a broader ecosystem including access to homeownership, living costs, family resources, policy support, and support for children’s development.
Under this framework, negative real estate signals are viewed as immediate threats that actively block social progress. On the flip side, modest market cooling or incremental state policies that merely ease financial strain at the margin are perceived as insufficient to fundamentally alter these deep-seated structural hurdles. Because these minor positive changes fail to shift households comfortably past that critical threshold of long-term security, the respondents’ outlook continued to lean towards pessimism and a loss of trust in the state.
Policy implications
For policymakers, the existence of a rigid "attainability benchmark" – and homeowners’ stubborn resistance to good news – reshapes the playbook for public communication and housing intervention.
In brief, the numbers on their own (e.g. Enhanced CPF Housing Grant increased from S$80,000 to S$120,000) are insufficient to breach the psychological threshold of long-term insecurity arising from a perceived increasing cost of living in Singapore.
What is perhaps more vital is the macro messaging of structural change that can promise equity, meritocracy, and dynamic social mobility. The newly introduced Plus and Prime HDB flats, for example, represent a compelling promise to citizens that people from all walks of life can have an opportunity to live in central locations in Singapore, and not be pushed to the suburban fringes.
By shifting the focus from subsidy numbers and mathematics to more fundamental concerns such as social inclusivity and equal opportunity, policymakers may find themselves much better positioned to address prevailing social and economic anxieties.
Chua, Yeow Hwee is an Assistant Professor of Economics at Nanyang Technological University (NTU), where he is Deputy Director of the Economic Growth Centre and a Faculty Affiliate of the Global Institute of Finance, Technology, and Society (GIFTS).
Wenyi Zhang is a PhD candidate in Economics at Nanyang Technological University.