88% of Singaporeans unhappy over high property prices: PropertyGuru
Younger Singaporeans are finding it harder to buy a home.
The majority of Singapore consumers are dissatisfied over the state of the property market, revealed PropertyGuru’s latest Consumer Sentiment Survey.
In fact, 88 percent of those unhappy with the market cited high property prices as their key concern.
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With this, the sentiment index for the first half of 2018 remained at 39 points, similar to the score achieved in the second half of 2017. The index is calculated based on six parameters including housing prices, satisfaction and consumers’ future expectations of the market.
The survey showed that consumers expect private property prices to increase significantly over the next five years. About 27 percent believe condo prices will grow by over 10 percent, while 25 percent see landed property prices increasing by the same rate. Only 13 percent of the respondents predict that HDB prices will rise by a tenth from current prices.
Given the new property cooling measures rolled out by the government, PropertyGuru chief business officer Lewis Ng expects consumers to take a wait-and-see approach to gauge where prices may go before committing to a purchase.
“With buyers now having to fork out more cash upfront, these recent moves have made it more expensive to consider property as an investment option,” he said. “Sellers looking forward to a market recovery to sell their properties, might feel some frustration as well, especially en bloc hopefuls who did not manage to see their sales go through prior to the measures.”
But even before the measures were tweaked to slow property price growth, only 27 percent felt that the government was not doing enough to make Singapore housing affordable. Around 53 percent believe that the price of newly launched properties by developers should be regulated by the state, while 49 percent want the state to impose more restrictions on foreign ownership.
Almost 50 percent of the respondents said the cooling measures should be relaxed, of which 80 percent called for the reduction of the ABSD imposed on Singaporeans purchasing their second and subsequent properties.
Other policies that respondents want to see relaxed include the caps on percentage of monthly income which can be used to service housing loans – namely Total Debt Servicing Ratio and Mortgage Servicing Ratio.
More: Financial Guide On Affordability: TDSR
Meanwhile, 39 percent of millennials surveyed – or those aged between 21 and 37 – currently live with their parents. A majority (or 66 percent) of these millennials are looking to acquire a home, with the central, northeastern and eastern parts of Singapore being the preferred location of their future homes.
However, 69 percent of millennials revealed that they do not have a structured savings plan to fund their housing purchase. Millennials with no intention to move out of their parents’ home pointed to the lack of adequate savings to buy a home as the main reason for staying with their parents. Other reasons cited include high property prices (33 percent) and not being married, which makes them unqualified for an HDB flat (44 percent).
While monthly CPF contributions may be used for future home acquisitions, but given the property prices in Singapore, Ng advises younger Singaporeans to set aside “a fixed percentage of their monthly paycheck to go towards their home purchase”.
“At the same time, before committing to a home, they need to ensure that they have adequate savings to finance their loans for at least six months to a year in the event they suffer any loss of income,” he added.
More: Can you afford a condo? Check your affordability now.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
