The largest and latest property consumer sentiment survey - the Asia Property Market Sentiment Report (APMSR) 2013, with 2,825 Singapore respondents, is out. Conducted by iProperty Group, Asia’s No.1 network of property websites, the APMSR reveals that despite cooling measures introduced by the government, buyers continue to view affordability as a major concern. Owners, on the other hand, are confident prices will not decline.

 Consumer Sentiments in Singapore (H2) 2013

Among the findings – 74% are delaying a purchase, and a large majority – 60% - have called for additional cooling measures. This compares to 27% who say ‘no’ to more cooling measures. Specific to HDB flats, 61% say current resale prices are not affordable to the average Singapore family, compared to just 23% who say they are.

iProperty.com Singapore General Manager, Mr Sean Tan, noted the positive and negative sentiments expressed in the survey. “Buyers are very concerned with price levels and affordability, and a large number of our respondents are delaying a purchase decision. The question remains whether delay is the best approach. Some analysts are projecting a decline in the market, but there have been endless projections of a decline over the past few years; prices have continued to rise. One issue we see is while cooling measures may be working, the high and sometimes record prices developers are paying for sites are not suggesting price declines anytime soon.

“On the positive side, 59% of owners are confident their properties will retain their value, despite the large numbers of new units coming into the market. Also, interest in new launches, investment properties, and especially condos, remains very strong across the board,” noted Mr Tan.

The survey reveals that new launches remain the first choice of buyers, topping existing properties 68% to 22%. And most buyers are looking not for a place to live, but for a long-term investment: 51%, up from the previous survey’s 30%. 46% are interested in rental income, and only 40% to own a home. Condos remain a hot option, with 68% interested in private condominiums, 35% in HDB flats and 16% in terrace houses. 

Getty Goh, Director at real estate research and investment firm Ascendant Assets, commented “Local pricing and affordability issues, coupled with a stronger Singapore dollar, are driving greater levels of interest in overseas property investment. During 2012, 38% of respondents stated they were considering overseas investment. That has increased to 40% in the most recent survey. Iskandar Malaysia is the most commonly cited overseas option, with 59% having considered, and most of them – 76% - viewing it primarily as an investment property.”

Interest and confidence in Iskandar continues to strengthen, with 94% viewing CapitaLand's & Temasek Holdings' investments in Iskandar as positive. While interest is high, concerns, notably regarding safety and security, are also high; 75% view crime and safety as an area ‘for improvement’. Infrastructure is a concern to only 10% of respondents.

“Based on the survey, and the various regulatory measures already in place, we see three key points: 1) owners remain confident about value protection and are generally not expecting declines; 2) buyers are hesitant, but with no real declines expected, waiting is unlikely to result in any real savings; 3) Iskandar is seeing a great deal of interest, entry points are very attractive compared to Singapore, and we are still at the very early stage of its overall development. Over the next few years, Iskandar is likely to prove a solid investment,” concluded Mr Tan.



Key Survey Insights

Buyers Delaying Purchase Decision
74% of respondents do not intend to buy a property within the next year. This is a huge increase from 2012, when only 38% expressed that opinion. Property transaction volumes are declining, as the latest URA data show, with new private home purchases down 73% to 481 units in July, from 1,806 units in June.
61% say current HDB resale prices are not affordable to the average Singapore family, compared to just 23% who say they are. A large majority – 60% - have called for additional measures to be implemented. 

Home Owners Confident of Asset Value Protection
59% of respondents are confident their property will retain its value, with 21% responding ‘no’. 51% are confident HDB flat prices will continue to rise for the next three years, despite 20,000 new Build-To-Order (BTO) flats every year since 2011. 28% say HDB prices will drop. Some respondents see declines in the private sector: 13% new private condos; 17% resale private condos; 23% non-landed luxury; and 12% landed luxury.

Buyers Prefer New Launches for Investment, Not to Live In
New launches remain by far the first choice, topping existing properties 68% to 22%. Cross referencing this data with URA resale volume data shows market sentiment and market performance closely correlated. During much of 2012, roughly 40% of transactions were resale properties, which most recently fell to less than 30%.
And most buyers are looking not for a place to live, but for a long-term investment: 51%, up from the previous survey’s 30%; for rental income – 46%; and 40% to own a home.

Condos Are Tops
The condo dream remains alive and well in Singapore. When asked which type of property they are most interested in, 68% chose private condominiums, 35% chose HDB flats and 16% terrace houses. 

Most HDB upgraders – 68% of respondents - are expected to buy mass-market condominiums, which offer more attractive yields compared to landed homes. Mass-market private home prices for the non-landed category have risen 10% in the past year, while landed home prices have risen by only 4% over the same period. 

Overseas Property Investment Interest Strengthens
Local pricing and affordability issues, coupled with a stronger Singapore dollar, are driving greater levels of interest in overseas property investment. In 2012, 38% of respondents stated they were considering overseas investment; that has increased to 40%. The recent introduction of the Total Debt Servicing Ratio (TDSR) may however constrain future interest for anyone looking to finance their overseas property through local banks.

While overseas investment interest continues to be strong, there have been some shifts in the top five countries of most interest to Singaporeans, with Malaysia declining, and Australia and Thailand seeing increases. Additionally, while Philippine properties have recently become higher profile that is not reflected in the survey findings.




Top 5 preferred investment locations by Singaporean respondents


Iskandar Malaysia is the 500 pound gorilla of overseas investment, with 59% having considered, and most of them – 76% - viewing it primarily as property for investment. 66% view investments in Iskandar as long-term, preferring Nusajaya (49%), over Johor Bahru (37%). 

Interest and confidence in Iskandar continues to strengthen, with 94% viewing CapitaLand's & Temasek Holdings' investments in Iskandar Malaysia as positive. While interest is high, concerns, notably regarding safety and security, are also high. 75% view crime and safety as an area ‘for improvement’. Infrastructure is a concern to only 10% of respondents.

Online Leads as Information Source
When asked to identify their sources of information on new property launches, a significant percentage – 70% - of respondents noted online sources, with 61% using newspapers/magazines, 48% flyers and brochures and  45% from flyers and direct mailers.

Budgets Remain Unchanged
The budget of respondents remains relatively unchanged compared to the previous survey. 22% of Singaporeans surveyed allocated less than SGD$500,000, while 16% would spend between SGD$1 million and SGD$1.5 million, followed by 13% on SGD$900,001 to SGD$1 million.





Related Categories: Daily Property News and Updates

Tags: new cooling measures, asia property market sentiments report, asia property market sentiments report 2013, overseas properties, Prefer New Launches, Property Value Protection

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