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11-08-23, 12:17
Home buyers undaunted by cooling measures, most will not defer property purchase this year: PropNex
August 11, 2023
According to the Home Buyers’ Sentiment Survey Report by PropNex Realty, about 56% of respondents do not plan to defer their property purchase this year despite market uncertainties and a new round of property cooling measures. In comparison, 44% of respondents say they will put their purchase decision on hold, with 48.8% of this group citing higher property prices as the main deterrent.
Other reasons to defer a property purchase this year include limited buying options at the time, HDB flat owners still locked in their minimum occupation period, and insufficient savings.
For the annual report, PropNex surveyed more than 450 prospective home buyers after the tightening of the additional buyer’s stamp duty rate in April 2023.
The survey was conducted to identify and assess the real estate needs of prospective home buyers, their housing preferences, and expectations about the Singapore residential property market in the year ahead. The survey was conducted after private home prices had gone up 3.3% q-o-q in 1Q2023. The price index rose by 8.6% in 2022 and 10.6% in 2021. “The strong price growth could have deterred some buyers from entering the market, particularly those with a tighter budget and who are more sensitive to price i[1]creases,” says Wong Siew Ying, head of research and content at PropNex.
Most of the survey respondents own at least one property, with 60.6% holding one property and 10.5% owning two properties. Meanwhile, 23.7% say that they do not currently own any proper[1]ty, and the rest say they own three or more properties.
High property prices will stay
Wong adds that an overwhelming 83% of respondents do not think that private property prices will fall in 2023. Also, 56% of respondents do not expect HDB prices to decline this year.
“Although there are signs of a price moderation in both housing segments recently, PropNex has maintained its price growth projections at 4% to 5% for the overall private residential market, and a 5% to 6% increase for HDB resale prices in the full year of 2023,” says Wong.
She adds that buyers are considering several cost-push factors that affect housing developers, such as higher land costs, rising construction costs, and higher borrowing costs. “This leaves developers with less wiggle room for price cuts in the primary home sales market,” she notes.
Moreover, the harmonisation of floor area definitions by the government in September last year, will likely lead to a reduction in total saleable area for condo projects and impact developer’s overall breakeven cost, says Wong.
This will have a trickle-down effect on the private and public resale markets as the higher cost of replacement homes will lead to firmer asking prices by homeowners, she adds.
The collective impact of various property cooling measures, as well as higher interest rates, continue to work its way through the residential housing market. This contributed to a more measured price movement in 2Q2023, says Ismail Gafoor, CEO of PropNex. He reckons that “this paves the way for more sustainable pricing and will ultimately benefit the consumers”.
Housing budget
Based on its consumer survey, 36% of respondents cite a housing budget of $1 million to $1.5 million, while 24% of them are comfortable with homes priced between $1.5 million and $2 million.
According to Wong, the survey findings show that HDB owners are more price-sensitive, and the majority have budgets of under $2 million. “At this price range, many HDB upgraders will still be finding suitable options in the new sale and resale market, particularly in the Rest of Central Region and Outside Central Region,” says Wong.
Gafoor says: “With home buyers’ budget being relatively inelastic in the near term, we believe many developers will price units in tune with prevailing market sentiment.”
The PropNex survey also notes that prospective buyers increasingly lean towards new launch projects compared to resale properties. About 84% of respondents say that they believe the value of a new condo unit will generally appreciate at a faster pace compared to older resale properties. The remaining 16% believed that the value of older resale homes are the ones that appreciate at a faster rate.
More at: https://www.edgeprop.sg/property-news/home-buyers-undaunted-cooling-measures-most-will-not-defer-property-purchase-year-propnex
August 11, 2023
According to the Home Buyers’ Sentiment Survey Report by PropNex Realty, about 56% of respondents do not plan to defer their property purchase this year despite market uncertainties and a new round of property cooling measures. In comparison, 44% of respondents say they will put their purchase decision on hold, with 48.8% of this group citing higher property prices as the main deterrent.
Other reasons to defer a property purchase this year include limited buying options at the time, HDB flat owners still locked in their minimum occupation period, and insufficient savings.
For the annual report, PropNex surveyed more than 450 prospective home buyers after the tightening of the additional buyer’s stamp duty rate in April 2023.
The survey was conducted to identify and assess the real estate needs of prospective home buyers, their housing preferences, and expectations about the Singapore residential property market in the year ahead. The survey was conducted after private home prices had gone up 3.3% q-o-q in 1Q2023. The price index rose by 8.6% in 2022 and 10.6% in 2021. “The strong price growth could have deterred some buyers from entering the market, particularly those with a tighter budget and who are more sensitive to price i[1]creases,” says Wong Siew Ying, head of research and content at PropNex.
Most of the survey respondents own at least one property, with 60.6% holding one property and 10.5% owning two properties. Meanwhile, 23.7% say that they do not currently own any proper[1]ty, and the rest say they own three or more properties.
High property prices will stay
Wong adds that an overwhelming 83% of respondents do not think that private property prices will fall in 2023. Also, 56% of respondents do not expect HDB prices to decline this year.
“Although there are signs of a price moderation in both housing segments recently, PropNex has maintained its price growth projections at 4% to 5% for the overall private residential market, and a 5% to 6% increase for HDB resale prices in the full year of 2023,” says Wong.
She adds that buyers are considering several cost-push factors that affect housing developers, such as higher land costs, rising construction costs, and higher borrowing costs. “This leaves developers with less wiggle room for price cuts in the primary home sales market,” she notes.
Moreover, the harmonisation of floor area definitions by the government in September last year, will likely lead to a reduction in total saleable area for condo projects and impact developer’s overall breakeven cost, says Wong.
This will have a trickle-down effect on the private and public resale markets as the higher cost of replacement homes will lead to firmer asking prices by homeowners, she adds.
The collective impact of various property cooling measures, as well as higher interest rates, continue to work its way through the residential housing market. This contributed to a more measured price movement in 2Q2023, says Ismail Gafoor, CEO of PropNex. He reckons that “this paves the way for more sustainable pricing and will ultimately benefit the consumers”.
Housing budget
Based on its consumer survey, 36% of respondents cite a housing budget of $1 million to $1.5 million, while 24% of them are comfortable with homes priced between $1.5 million and $2 million.
According to Wong, the survey findings show that HDB owners are more price-sensitive, and the majority have budgets of under $2 million. “At this price range, many HDB upgraders will still be finding suitable options in the new sale and resale market, particularly in the Rest of Central Region and Outside Central Region,” says Wong.
Gafoor says: “With home buyers’ budget being relatively inelastic in the near term, we believe many developers will price units in tune with prevailing market sentiment.”
The PropNex survey also notes that prospective buyers increasingly lean towards new launch projects compared to resale properties. About 84% of respondents say that they believe the value of a new condo unit will generally appreciate at a faster pace compared to older resale properties. The remaining 16% believed that the value of older resale homes are the ones that appreciate at a faster rate.
More at: https://www.edgeprop.sg/property-news/home-buyers-undaunted-cooling-measures-most-will-not-defer-property-purchase-year-propnex