This is the top frustration of those that won’t buy new homes soon.
Almost half (46%) of Singapore’s home buyers anticipate prices to rise further this year, leading to dissatisfaction in the residential market, PropertyGuru’s 2H2017 Consumer Sentiment Survey revealed. This is the highest number in four years.
According to PropertyGuru’s News and Views, whilst satisfaction levels in the Singapore residential market have gone up (37%), unsatisfaction levels are still higher (42%). About 21% of respondents are neutral.
About 37% of respondents cited high prices as the top deterrent for not purchasing a property. In the next six months, price hikes for condos are the most anticipated (67%), up from 57% in the previous survey. More respondents (72%) expect condo prices to grow in the next five years. About 26% anticipate price increases of more than 10%.
Meanwhile, the record satisfaction level is due to the anticipation of long-term capital appreciation (45%) and the prevailing low mortgage rates (30%). Additionally, 28% said Singapore has a stable and resilient real estate market.
On the topic of HDB flat prices, 39% think they will increase in the next six months, down from 54% in the previous survey. Additionally, only 2% think that HDB prices will increase by more than 10%.The majority expect HDB prices to increase by less than 5%.
PropertyGuru noted that whilst price increases are on the cards, the picture for the rental market is less clear. “Across the different residential types, equal percentages of respondents expect rents to increase and decrease in the next six months. The still high vacancy rate coupled with the rise of disruptors such as Airbnb could have contributed to the uncertainty in the short-term rental market,” it added.
However, the picture is more optimistic for the long-term rental market as 51% said rentals will increase in the next five years, much higher than 21% that expect rentals to decline.
PropertyGuru also noted that about half of the respondents intend to buy a residential property in the next six months. “The purchase intent for condominiums has increased most strongly compared to other property types. This could be driven by replacement demand from homeowners who successfully sold their homes via en bloc sales. In addition, the returning optimism in the residential market may have convinced some buyers to take the plunge before prices rise further.”
About 44% plan to buy homes in districts 15 (East Coast and Marine Parade) and 11 (Newton and Novena), making them the most popular spots on the island. A whopping 71% plan to buy at a budget of at least $750,000.
“Amongst those who intend to buy a property, proximity to their workplace and amenities such as malls, parks and schools are key deciding factors. Home buyers also cited size of bedrooms as well as orientation and age of the unit as their main considerations when choosing a unit,” PropertyGuru said.
Singapore’s residential property market opened the year on an encouraging note as home sales rose 21% MoM to 522 sold units in January. Orange Tee Research said despite the higher buyer’s stamp duty (BSD) rates for residential properties announced in Minister Heng Swee Keat’s budget address, the property market remains on good enough footing to withstand higher rates.
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