Consumer sentiments report says affordability remains a top concern; tighter restrictions seen to impact sales but not prices.
SINGAPORE, 4 February 2013 – The iProperty Group, owner of Asia’s No. 1 network of property portal sites under the iProperty brand (www.iproperty.com) today released its iProperty.com Asia Property Market Sentiment Report (APMSR) H1 2013, revealing a continuing clamor for Government to heighten the affordability of public housing.
“Singapore property buyers understand that prices will continue to go up, but appreciate the Government stepping in to manage the pace and ensure that public housing will remain within their reach,” said Sean Tan, General Manager of iProperty.com Singapore.
Tan said the seventh round of cooling measures, which was announced on 12 January 2013, just two weeks after the survey was completed, would impact property sales but unlikely to make a dent in terms prices.
“The new measures would certainly make residential property buyers more cautious. In fact, the sentiments report already reflects this trend, with more than half of the consumers surveyed said they may be deferring their purchase much longer to up to two years. I think we can expect property sales to dip slightly as a result of the new measures, but prices will continue to go up, or at best, remain flat in 2013,” he added.
He continued, “However, low interest and high liquidity are expected to keep the property market buoyant, even in the face of tighter restrictions.”
Carried out in four markets – Singapore, Malaysia, Indonesia and Hong Kong with a total of 17,303 respondents, including 2,099 from Singapore, the iProperty sentiments survey aims to provide property investors, buyers, sellers and owners – both locals and expatriates – with insights into the property market from a consumers’ perspective.
In Singapore, rising property prices resurfaced as a top concern, and sentiments lean towards Government taking a more active stance to decelerate the increases.
While respondents seemed to favour stricter market restrictions, a surprising 70% indicated that they were likely to support government moves to allow singles to buy new HDB flats, a reversal of the current rules that limit HDB flat ownership to singles over the age of 35 who purchase on the open market. Changing the rules would allow singles, too, to enjoy the benefits of subsidized public housing.
Key findings include:
- 64% of the survey respondents felt the current resale prices of HDB flats are not affordable to the average Singaporean family
- 50% of survey respondents predicted prices will continue to rise over the next three years despite an increased supply of build-to-order (BTO) flats
- 67% of those surveyed opined that government should take more active steps to cool the market
- 41% of the respondents felt that the government is not doing enough to ensure sufficient housing is available to foreigners
Overall, the forecast for the Singapore property market in 2013 remains positive, with 55 % of respondents unfazed by fears of a property bubble. Majority of respondents (66%) are confident that their property will retain its value in 2013.
Market Realities
The report also revealed an interesting alignment between consumers’ preferred measures to curb HDB price increases and the government’s approach.
Respondents’ felt HDB prices could be better controlled if the Government were to adopt measures such as, imposing stricter guidelines for permanent residents subletting or selling their HDB flats (45%); putting a cap on resale prices of HDB flats (30%); and putting a levy on subletting HDB flats (25%).
“The issues and proposed solutions that figured prominently were addressed in the latest round of cooling measures. It is a testament to how the study reflects market realities,” Tan added.
To deliver more useful insights to property buyers and sellers, iProperty.com Singapore has partnered with Ascendant Assets Pte Ltd, one of Singapore’s real estate research consultancies, to analyse the sentiments and how the trends have evolved over the past few years.
“In the 2013 survey, about 72% of the respondents indicated that they do not intend to buy a property in the next one year. For consumers, it is not easy to fathom what 72% means. However, if consumers know that only 38% gave that answer the year before, it would definitely be more telling. We are working with iProperty.com Singapore to identify these underlying trends so that the study can become a truly invaluable tool that consumers can use in deciding when, where and what to buy,” said Getty Goh, Director of Ascendant Assets Pte Ltd.
Download full report at http://www.iproperty.com.sg/asia-property-market-sentiment-report.
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Ask any ambitious young banker you know who they aspire to be, and chances are the first name that rolls off their lips would be Wee Cho Yaw, the current Chairman of UOB. The banking giant was founded by his father, Wee Kheng Chiang. Next in line to take over the family business is his son, Wee Ee Chong, who currently serves as the CEO of UOB. Wee Cho Yaw also has a hand in the property business, with holdings in 
27 Apr
PropNex CEO: What Seniors & Singles Should Be Thinking About Right Now
In this exclusive one-on-one interview with iProperty.com at the recent iProperty.com Expo at Marina Bay Sands, CEO of PropNex and Singapore’s leading real estate expert Mohamed Ismail Gafoor discusses the latest trends in the Singapore and Malaysia property market. He also provides valuable advice for 2 growing demographic groups in Singapore: seniors who own a house and are planning for their life after retirement, and singles under 35 contemplating their first studio home purchase.
Mohamed Ismail speaking to a full crowd at the iProperty Expo at Marina Bay Sands
Q. You have often emphasized that landed housing in Singapore is by far the best choice for real estate investors. Could you tell us why?
Landed property will always be a goldmine – for the simple reason that land is in limited supply, and Singaporeans will always consider owning a landed house to be their ultimate dream.
However, not all landed properties are created equal. While the government can still release sites for landed properties with a 99-year lease, the existing stock of freehold landed properties are highly limited. I would lean away from landed properties with a 99-year lease as they present unique challenges for their owners. It is much harder for leasehold landed properties to meet the criteria for enbloc, as a 100% owner consensus is required – as compared to private condos more than 10 yrs old which need only 80%. There is only a 20-25% price difference at the entry-level for freehold vs. leasehold for landed properties, but the key advantage of freehold landed homes is that it provides for perpetual ownership, making it a much better deal.
Q. What are the possible implications of the proposal to double the entry price at which foreigners can buy real estate in Malaysia?
First of all, I can certainly understand the rationale behind such a policy proposal. Just as what has happened in Singapore, the Malaysian government is concerned about a property bubble forming, and likewise they also have to address the growing public concerns on the ground about rising property prices.
In spite of this, I remain very confident that the M$1 million minimum price for foreign purchasers of Malaysian property will not be a blanket limit across all states. In particular, such a policy would not be advantageous for the state of Johor especially when the entire Iskandar project is still at the infancy stage of development. It is likely the MY$1million minimum purchase price will apply to properties in the downtown KL region, but highly unlikely for areas such as Ipoh and Malacca.
As many well-off Singaporeans have already been picking up units well above the MY$1 million mark, it will not be surprising if they remain willing to pay for a good product which is still relatively affordable, particularly given the strength of the Singapore currency. Those most likely to be affected by the higher entry price are HDB upgraders, who have been mostly buying lower-tier fringe properties.
Q. What should senior citizens keep in mind when deciding if they should opt for the LBS (Lease Buy-Back Scheme), or “downsizing” to a studio flat instead?
PropNex CEO Mohamed Ismail
The LBS has the advantage of allowing seniors to continue to stay in the same flat in the same environment they have grown used to after many years. While some may be concerned about “outliving” the 30 years remaining on the lease under this program, the reality is that there are many seniors who will require specialized care at a health-care facility by that age. Hence, although the take-up rate for the LBS scheme has been low, I do see some do see some merit in this program.
However, I consider “downsizing” to be the more exciting option among the two. Downsizing to a studio apartment allows seniors to be able to completely cash-out on their existing property and use part of the proceeds to buy a smaller elder-friendly property at a reasonable price. Living in an elder-friendly community with adapted facilities (e.g.: lifts and ramps) will also provide a close-knit community where seniors can grow old together. Furthermore, having a lump sum payment in hand also gives one a greater feeling of strength and security. However, the inherent risk in “downsizing” is that seniors who do not have necessary skill or discipline to manage their funds can lose everything very quickly. Hence, deciding which option to go is very much an individual decision.
Q: What advice do you have for single working professionals under the age of 35 who are contemplating investing into a private studio flat for their own-stay?
As Singapore’s population continues to increase, it is inevitable that property sizes will shrink. Although shoebox unit sizes in Singapore are still decent compared with cities such as Tokyo and Hong Kong, it is undeniable that reduced space and high density will lead to a compromised lifestyle.
For single working professionals who want to move out of their parent’s house into their own home for lifestyle reasons, I would say that it is perfectly okay to buy studio apartment – but they really need to look out for the PSF (price per square feet) they are paying. Although the quantum of studio apartments may be low, all capital appreciation is ultimately a by-product of rental yield. Hence, the risk is that if rentals do not go up much, there is limited room for capital to appreciate. Paying high prices for an entry-level studio flat in the outlying areas could mean there may be limited scope for rental appreciation.