RESIDENTIAL PROPERTY | Staff Reporter, Singapore

2 in 3 Singaporeans can still afford homes despite hefty price tags: study

Residents are lured by cheaper homes from cooling measures and flat HDB resale market.

Over two in three or 64% of Singaporeans said they are able to buy a home at the current prices and within their current incomes, with 27% intending to buy a home in the next year, PropertyGuru revealed in its 2019 Consumer Sentiment Survey. The willingness to enter the pricey property market comes is is despite 88% saying that they believe property prices are high and 72% expecting prices to rise in the next six months.

PropertyGuru also found that the market’s optimism grew thanks to increased affordability, ease of getting financing, good long-term prospects, and government policies. Its Sentiment Index score rose to 45 in H1 2019 from 39 in the previous year.

Jeremy Williams, chief business officer, PropertyGuru Group commented, “With prices in the private property market starting to see declines from cooling measures, and the HDB resale market remaining flat, buyers are likely to consider entering the market in 2019. Furthermore, with at least 40 new launches expected to hit the market this year, private property buyers will have plenty of options to choose from.”

One in four or (41%) of the respondents indicated satisfaction with Singapore’s real estate climate due to
the long-term prospects for capital appreciation, stable real estate market, and local economy. Moreover, more than half of the respondents who are satisfied with the real estate climate are PMEBs (Professionals, Managers, Executives and Businessmen) aged 30 to 49 years, drawing medium to high incomes and are married with children.

“Many within this demographic group have experienced what we call the ‘first bite of the cherry’, having made some money when selling their matrimonial home that has enabled them to upgrade to their next home. As such, these individuals are most likely to view real estate as a means of growing their nest egg for the future,” Williams added.

However, for 39% of those surveyed, restrictive government policies remain a matter of contention and there is rising dissatisfaction not only with increasing property prices but also with small unit sizes that come with these high price tags.

Upgraders pick ECs
Compared to H1 2018, there has been an increase in respondents’ intention to buy a condominium (by 22%), landed property (by 20%), and mixed-use development (by 32%), within the next six months. For those keen on upgrading to private property, positive perception rose the highest for ECs (by 6%) as these are available at relatively affordable prices.

PropertyGuru also found that there is a growing trend of young Singaporeans moving out of their family homes earlier. At least 24% of millennials who moved out of their parents’ homes were aged 27 and below, with two in three respondents owning their first property between the age of 28 and 34 years.

“The increased affordability could be due to the rise of co-living concepts where people rent or purchase properties together, lowering the price of the overall unit and making it more achievable,” PropertyGuru said. 

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