SAJC 2025 JC2 H2 Econs Prelims P1 Suggested Answers

Suggested Answers Question 1: The housing market in Singapore (a) With reference to Figure 1, compare the change in HDB resale and private homes prices in Singapore from 2016 to 2021. [2] Similarity: Both the prices of HDB resale and private home generally increased from 2016 to 2021. Difference: Prices of private homes increased at a faster rate than that of HDB resale from 2016 to 2021. Examiner’s Comments: Content Strength: • Most students were able to provide one similarity and one difference in the change in prices. Areas of Improvement: • Be mindful that the question asked about changes in prices. It is incorrect to state that “private homes prices were always higher than HDB resale prices,” since the focus is not on levels but on changes over time. • When highlighting differences, students should compare the entire trend from 2016–2021. For example: While private homes prices consistently rose throughout 2016 –2021, HDB resale prices fell from 2016–2018 before recovering. • Carefully read off the data, especially for the years in which HDB resale prices fell. The numerical indices show that HDB resale prices declined until 2018, not 2019. • Students should state that private homes prices increased at a higher relative rate of change compared to HDB resale prices. Skills Areas of Improvement: Students need to improve their data reading skills (interpreting numerical indices accurately) and writing skills (expressing changes over the entire period clearly). (b) Extract 1 states that prices of private homes hit new records. Explain why there was such a high rise in the price of private homes in 2021. [3] Rise in demand due to (any one point below) – [1] -lower cost of borrowing as interest rate fall

-rise in income due to economic recovery led to rise in demand for normal goods such as private homes -pent-up demand indicating greater taste and preference for private homes PES of private homes <1 as long time required to construct private home due to delays in construction resulting in a longer time to develop new private housing units or limited inventory stock of unsold units available– [1] Shortage at original equilibrium prices exerts upward pressure on prices and it takes sharp bidding up of prices as quantity supplied of private homes rise less than proportionately. This results in a high rise in the price of private in 2021. – [1] Other possible answers: Multiple factors of DD leading to an overall large rise in DD OR Explain high rise in price with the use of YED >1 or PES <1 Examiner’s Comments: Content: Strength: • Many students correctly identified that housing demand increased and supported their answers with at least one factor and relevant evidence. Areas of Improvement: • While many explained the price adjustment process, students must also account for the sharp increase in prices. This requires app