- Singaporeans call for a reduction in ABSD, interest rates, and down payment costs
- Over 8 in 10 surveyed would consider properties with fewer facilities at a lower price
- Property features like proximity to F&B amenities, ventilation, and natural lighting are now more important to Singaporeans following COVID-19
- Katong, Punggol, and Bishan are areas most sought after by Singaporeans
SINGAPORE, 8 July 2020 – PropertyGuru Group, (“PropertyGuru” or the “Group”), Asia’s leading property technology company, today revealed that Singaporeans are feeling less optimistic about the real estate market for the second half of this year in its biannual Consumer Sentiment Study.
The study’s overall Sentiment Index dipped by four points from 45 in H1 2020 to 41 in H2 2020, over a series of concerns raised around housing affordability, property prices, the overall real estate climate, and the perceived government efforts in the property market amid the current pandemic. Those dissatisfied with the current real estate landscape cite property prices not softening to levels they expect in the current situation, as a significant reason.
Across the four markets, which include Singapore, Thailand, Indonesia, and Malaysia, where the study was conducted, Singapore has seen the most drastic decline in a positive outlook on property prices in the next five years, with price perception dropping from 72 in H1 2020 to 56 in H2 2020.
Earlier this May, the Singapore government introduced several temporary property relief measures for individuals affected by the COVID-19 pandemic, such as a six-month extension for the remission of Additional Buyer’s Stamp Duty (ABSD) for a second residential property purchase.
However, 63% of Singaporeans are still hoping for the government to further ease property curbs by lowering the cost of ABSD. This number is highest across middle-aged Singaporeans (70%) and dominated by property investors or landlords. Conversely, the majority (68%) of younger Singaporeans looking to buy or rent a home for own-stay purposes are more interested in seeing a further reduction in home loan interest rates, while 59% say they would like a reduction in downpayment costs.
62% of Singaporeans also want the government to reduce Buyer's Stamp Duty (BSD), which is currently up to 4% for residential properties.
Tan Tee Khoon, Country Manager of PropertyGuru Singapore said, “The call for the government to ease property cooling measures like the lowering of ABSD, especially amongst property investors and landlords that this tax was chiefly targeted at, comes in the face of a looming economic recession and the estimated overhang of 30,000 unsold residential units. Besides, the macroprudential safeguard of the Total Debt Servicing Ratio (TDSR) will continue to rein in property seekers from overleveraging on borrowing even if ABSD is reduced or relaxed. On the flip side, younger Singaporeans would have just entered their peak home-buying years, so feedback would sway toward lower loan interest rates and downpayment costs to help curb one of their largest lifetime expense.”
When asked how the current COVID-19 situation has impacted their property-related decisions, more than half (55%) of Singaporeans felt an increasing uncertainty over property prices in the current climate. This hesitation has led to sellers holding off property sales in hopes of receiving better offers, and buyers holding off on property purchases for lower prices. The study also found that about two in five (42%) property buyers have become more price-sensitive and 82% of property buyers were willing to compromise on home facilities in exchange for a more affordable home.
“It is no surprise that buyers are taking a more cautious approach towards property decisions given the heightened levels of market volatility brought by the COVID-19 pandemic,” said Tee Khoon. “That said, the eventual decline of COVID-19 cases in the community and subsequent resumption of the economy should see the release of pent-up demand for property buyers and sellers.”
Interestingly, two in five (40%) property buyers still intend to make a home purchase for own-stay purposes within the next year, particularly 60% of those renting and 76% of those living with parents.
Top areas Singaporeans looking to purchase in are in District 15 (Katong, Joo Chiat, Amber Road, East Coast Road, Siglap), District 19 (Serangoon Gardens, Hougang, Punggol) and District 20 (Bishan, Ang Mo Kio, Thomson Road). Proximity to F&B outlets and malls (61%), and ventilation and natural lighting (54%) are also the top two features sought-after by Singaporeans following COVID-19.
Singaporeans are counting on property developers and banks to help stabilise the property market amid the global recession. While 79% of Singaporeans indicate that developers should lower property prices, and 62% think that developers should focus on affordable housing projects, 51% expect more attractive home loan refinancing packages from banks.
78% of Singaporeans surveyed indicated a clear preference for bank loans while 22% indicated that they prefer HDB loans, when looking for a new home. This preference was distinct among older (89%), high-income earners (91%). Younger (43%), lower (27%) to mid-income earners (44%), on the other hand, are more likely to opt for the latter form of repayment. Similar differences were observed for home loan refinancing, with 71% and 78% of older, high-income earners, respectively, indicating more familiarity with the refinancing process. Collectively, these findings reveal ample room to grow awareness about alternative home-financing options in Singapore, especially amongst younger homeowners – once they can afford to.
It is noteworthy that a third of Singaporeans (34%) who favoured bank loans considered the dizzying array of loan options a barrier to application, followed by the long processing time (22%), and the lack of easy status checks (20%).
Paul Wee, Managing Director of Fintech at PropertyGuru Group, pointed, “While HDB loans are a go-to option for those with a lower risk appetite given its stable interest rates, now is the opportune time for homebuyers to take a bank loan, or refinance, as the low interest rate environment is likely to persist for some time. Today’s home refinancing options are also more accessible with banking or independent home loan experts like PropertyGuru Finance that will be able to provide a perspective on which home loan applications are worthwhile opting for based on current needs, as well as guide them through the process.”
The study pointed out that Singaporeans’ appetite for overseas property investment remains steady, with nearly 40% planning to purchase property overseas within the next few years. Of the respondents surveyed, Australia, Malaysia and Thailand were indicated as the most popular overseas locations among Singaporean property investors, chosen by 23%, 18%, and 10% survey participants, respectively. Singaporeans chose ‘affordability of properties overseas’ and ‘for retirement’ as the top reasons for purchasing a property overseas.
“Overseas property investment has always been a draw for Singaporeans as property prices can be far more attractive than locally and can also be used to fund a retirement,” added Tee Khoon. “Those with a healthy balance sheet and strong finances who are still on the fence on overseas property investments can consider this as a viable option for diversifying their investment portfolio, and to balance risk and reward amid the bearish market.”
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About PropertyGuru’s Consumer Sentiment Study
Conducted half-yearly since 2009, PropertyGuru’s Consumer Sentiment Study measures property sentiments and expectations around the property market to help consumers, property agents and developers gain a better perspective of the local property market. The H2 2020 study saw 1,007 respondents in Singapore.
About PropertyGuru Group
PropertyGuru.com.sg was launched in 2007. It revolutionised the Singapore property market by taking it online and making property search transparent for everyone. For the past 13 years, PropertyGuru.com.sg has been helping property seekers in Singapore make confident property decisions. With over 5.5 million monthly visits* and 75%** consumer market share, PropertyGuru is the No.1 destination for Singapore homeseekers.
It is part of PropertyGuru Group, Southeast Asia’s leading property technology company and the preferred destination for 24.5 million property seekers to find their desired home, every month. PropertyGuru Group of companies empower property seekers with the widest option of over 2.7 million homes, in-depth insights and solutions that enable them to make confident property decisions across Singapore, Malaysia, Thailand, Indonesia, and Vietnam.
Over the decade, the Group has grown from a regional property media powerhouse to a high-growth technology company with a robust portfolio comprising: leading property portals across its core markets; award-winning mobile apps; a SaaS-based sales automation solution, ‘PropertyGuru FastKey’, which is used by property developers to enable end-to-end project management from launch to sales conversion; one of the largest property awards business in the region, ‘PropertyGuru Asia Property Awards’, which sources entries from fourteen markets across Asia.
For more information, please visit propertyguru.com.sg; linkedin.com/company/propertyguru
*Source – Google Analytics data, Jul-Dec 2019
**Source – SimilarWeb – Relative Engagement Market Share, average of Jul-Dec 2019
For further queries or media interviews, please contact:
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Archetype Singapore Gladys Foo / Irene Teoh +65 9728 2344 / +65 8112 7803 |
PropertyGuru Group Timothy Beer +65 8355 7208 |