Despite the muted economy outlook, Singaporeans are more optimistic and satisfied with the property market, according to the latest findings in PropertyGuru’s H1 2020 Consumer Sentiment Study, a half-yearly poll which measures consumer perceptions of the local property market.
This is reflected in The Sentiment Index, which rose 5 points from 40 in the previous wave to 45. The Sentiment Index measures factors such as current real estate climate satisfaction, property affordability, current real estate climate, perceived government effort, and property prices in the next 1-5 years.
Satisfied with government policies
In the study, 39% of the 985 respondents said that they were happy with the government’s efforts in making housing more affordable, compared to just 34% who felt so in the previous study.
The uptick in positive sentiment could be linked to the new measures that the government announced last year.
In September 2019, the government announced several policies to make public housing more affordable and accessible, namely the new Enhanced CPF Housing Grant (EHG) and the raising of income ceilings to S$14,000.
In addition to that, EHG also doesn’t restrict the flat types and estates, offering more flexibility for both BTO and resale flat buyers.
Meanwhile, 52% of those surveyed said they were satisfied with the current real estate climate — a 10% increase from the previous survey.
Younger Singaporeans most optimistic about future property prices
When it came to future property prices, the study also revealed that younger Singaporeans were the most optimistic bunch; 89% of Singaporeans aged between 22 and 29 said that they are optimistic about future property prices in the next 1-5 years.
70% of Singaporeans are also looking to buy a home in Singapore within the next 5 years, with non-landed private properties being the main preference (58%). 46% also said that they will buy in the Central area, with future MRT lines (89%) and government Master Plans (82%) cited as key considerations for property purchase. Half of the respondents said that were going buying for investment purposes.
Dr. Tan Tee Khoon, Country Manager – Singapore, PropertyGuru, said, “Amidst the current macroeconomic headwinds and ongoing COVID-19 situation, we do not expect property prices to significantly drop and we are confident that property prices will remain stable in 2020. Buyers, who are looking to purchase a property this year, should first and foremost consider their needs in their property search and be prudent in their buying decision – calculate their finances and have contingency plans to service mortgage loans in the event of unemployment or an emergency.”
One year post-cooling measures
2019 also marked the one-year anniversary of the cooling measures, which saw the government introduce Additional Buyer’s Stamp Duty (ABSD) and tightening loan-to-value (LTV) limits on residential property purchases.
While more than half of Singaporeans agreed that ABSD helped to stabilise the property market, 60% of Singaporeans wanted ABSD relaxed for their second property. Singaporeans also want more leeway when it comes to borrowing for home loans.
In regards to LTV rates, just over a third of respondents felt that the ability to borrow 75% of a property’s value is too low. Given 72% of respondents believe that property prices will continue to increase over the next five years, it could mean that the desire for more home financing support will continue to be on the uptrend.