Singapore Consumer Sentiment Study H2 2022

Eugenia Liew
Singapore Consumer Sentiment Study H2 2022
The PropertyGuru Singapore Consumer Sentiment Study (CSS) H2 2022 revealed that the overall Sentiment Index – which measures current real estate satisfaction and overall climate, housing affordability, interest rates, perceived government efforts, and property prices in Singapore – decreased to 45 points in H2 2022, down by 6 points from 51 in H1 2022.
The dip is driven by a lower overall satisfaction compared to the previous half. Compared to H1 of 2022, in H2 the affordability rating and current real estate climate score declined from 64 to 58 and 19 to 14 points, respectively. Fewer Singaporeans felt interest rates are at a reasonable or fair level in H1 2022, with more feeling that the government has not done enough to make housing affordable compared to H2 2021.

Key Finding #1: More young Singaporeans renting due to high property prices

1 in 3 Singaporeans felt the pinch caused by the rising rental prices but are unable to find a cheaper rental than what they currently have. Yet, most young Singaporeans (66%) between the ages of 22 to 29 chose to rent instead of purchasing a property due to the lack of savings. Some (36%) are also renting as they do not feel the urgency to buy a property right now.
55% of Singaporeans are affected by property tax adjustments. Nearly a quarter of young Singaporeans (21%) have found current property prices too high, opting to save their money rather than getting a property of their own. As a result, some are keen to explore alternatives like the co-living concept of shared housing with cheaper rent and common facilities – 32% who shared their interest consist of young Singaporeans. Housekeeping services and full-furnished rooms are some other reasons that make the co-living concept appealing.

Key Finding #2: Need for more personal space is now the top reason for Singaporeans looking for a new home

Most Singaporeans (72%) intend to buy a property within the next two years. Of which, more Singaporeans (36%) are looking to purchase a new property in the next two years due to the lack of personal space where they currently reside – an increase from 27% in H2 2021. The sentiment is significantly higher among millennials – 54% and 48% for those aged 22 to 29 and 30 to 39, respectively. Meanwhile, the intention for purchasing a new home for investment dipped significantly, from 44% in H2 last year to 33% in H1 this year.
Dr. Tan Tee Khoon, Country Manager of PropertyGuru Singapore, said, “The pandemic and evolution of hybrid work have sparked a shift in consumer buying behaviour. Our last Consumer Sentiment Study H1 2022 found that 42% of Singaporeans expected greater demand for larger homes post-pandemic.
As work from home continues for most professionals in Singapore, property seekers are finding the need for more living space. That increases the demand for larger residential types and makes HDB resale flats a preferred option over private residential homes due to its affordability.”
With larger square footage, HDB resale flats (30%) are now the preferred choice for those in search of a new home compared to resale non-landed properties (23%) and resale landed properties (6%). Jumbo flats are the favourite pick (44%) for those intending to purchase an HDB resale flat. “Rare HDB flat types that feature big spaces like those under the Design, Build and Sell Scheme (DBSS), or executive apartments and maisonettes which are no longer in development can fetch higher prices, some surpassing the million-dollar mark. In an inflationary environment with prices of private homes rising, a spacious HDB flat in a great location going for $1 million is an absolute steal, contributing to the increase of million-dollar HDB houses transacted this year,” said Dr Tan.
Additionally, couples looking to buy a new flat as they are getting married have spiked, from 10% in H1 to 22% in H2 this year. Demand for new HDB BTO launches has witnessed a two-fold increase, from 8% in late 2021 to 16% in early 2022.

Key Finding #3: Singaporeans are divided between housing loan types, but some keen to refinance

HDB home buyers and owners are divided when it comes to choosing between a bank loan (50%) or an HDB loan (50%) for their HDB purchase. However, it is clear that older HDB buyers and owners prefer picking up a bank loan to finance their HDB purchase – 61%, 66%, and 69% for those between 40 to 49, 50 to 59, and above 60 years old, respectively.
On the other hand, most young Singaporeans between the ages of 22 and 29 (83%) and low-income (71%) HDB buyers and owners opt for HDB loans. Inadequate cash flow was cited as the key reason among low-income earners (31%). However, 35% of HDB owners on an HDB loan intend to refinance with a bank loan due to the lower interest rate and payment and the opportunity to save more money. That is especially true during this period of high-interest rates.
Paul Wee, Vice President, PropertyGuru Finance, PropertyGuru Group, shared that: “Bank mortgage packages remain the most competitive in the market, with many offering rates under 2.3%. However, it is important to look beyond interest rates as well, as each borrower has their own unique goals, circumstances, and plans.”
76% of Singaporeans are reacting or planning to react in response to the rising interest rates, with 20% taking more time comparing the various home loans and 13% looking to refinance their home loan before interest rates increase further.
“In the current environment, it is most important to actively manage your home loan, leveraging refinancing to maintain cash flow and keep interest costs down. Singaporeans can familiarise themselves with mortgage refinancing via free online resources, seek assistance from mortgage specialists or leverage tools such as PropertyGuru Finance’s SmartRefi to make the best home financing decisions,” said Paul.

Findings from Previous Consumer Sentiment Studies:

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