More than Half of Singaporeans Intend to Buy a Home Despite Rising Prices: PropertyGuru Study

More than Half of Singaporeans Intend to Buy a Home Despite Rising Prices; with 1 in 3 Millennials Eyeing Luxury Property: PropertyGuru Study

New study also reveals Singaporean homebuyers calling for forest preservation over future development projects

SINGAPORE, 24 August 2021 – PropertyGuru, Singapore’s No.1 property marketplace with 75% market share*, today revealed that Singaporeans are defying the current economic downturn and intend to buy a home despite rising prices. Amid this strong buying intent, Millennials also aspire to move up the property ladder, eyeing luxury homes. These findings align with the latest biannual H2 2021 PropertyGuru Consumer Sentiment Study, which measures the Singapore property market’s current consumer sentiments and expectations.

The study’s overall Sentiment Index – which measures current real estate satisfaction and overall climate, housing affordability, interest rates, perceived government efforts, and property prices – increased to 48 points in H2 2021, up by 5 points from 43 in H1 2021.

This uptick is driven by Singaporeans’ positive outlook on future property prices, a fair perception of home loan interest rates, and a rise in the Property Affordability Rating, a score that measures consumers’ perception of property prices in Singapore today and their ability to afford a property in their current prices and income.

Buying sentiment remains strong despite rising home prices

While 90% of Singaporeans find property prices high, more consider themselves able to afford a property in their current prices and income, up from 60% in H1 2021 to 65% in H2 2021. In fact, 74% of Singaporeans still intend to purchase a home in the future despite rising home prices. Among these, more than half intend to buy a home within the next two years (53%).

Nearly half (46%) of Singaporeans are satisfied with the array of good financing options available amid the low interest rate environment. 51% of Singaporeans believe this is the best time to get the most bang for their property buck in the long term, with 83% expecting property prices to increase over the next five years. It is also noteworthy that 1 in 3 Singaporeans (33%) eyeing HDB resale flats are willing to pay Cash Over Valuation (COV) for their preferred property. This willingness is greater amongst older (40%), higher-income earners (40%).

Singaporeans are keen to make smart and sustainable living choices

82% of Singaporeans are willing to consider paying more for an environmentally sustainable home, with their top three sustainability features comprising smart cooling systems (65%), high-insulation windows and doors (60%), and solar panels (54%). It follows that Singaporeans welcome the Government’s new HDB Green Towns Programme, a 10-year plan to make HDB towns greener and more sustainable, with 2 in 5 (46%) willing to pay more to live in one. Despite the city state's limited land space, most Singaporeans (81%) also voiced the need to preserve forested areas from urban development.

Dr. Tan Tee Khoon, Country Manager of PropertyGuru Singapore, said, “It is encouraging to see Singaporeans across generations embrace more eco-conscious home buying behaviour to advance sustainability efforts and combat climate change. As a leading proptech company in Singapore, we want to empower consumers and their growing desire for a sustainable future through tools like the PropertyGuru Green Score[1], which enable them to identify eco-friendly homes easily by assigning a sustainability rating to properties listed on our portal. The collective shift towards greener practices will simultaneously pave the way for more government initiatives and solutions around responsible urban planning that will positively impact the environment and help protect our planet.”

Millennials are poised to reshape the housing market

71% Of Millennials In Singapore Are Prioritising Saving For Home Buying This Year Over Experiences Like Travel, Food, Hobbies, And Staycations, Up By 2% From H1 2021 (69%). Millennials Also Aspire To Move Up The Property Ladder, With 69% Of Millennial HDB Homeowners Intending To Upgrade To Private Property After Selling Their HDB Flat. Of Which, 68% Are Looking To Purchase A Non-Landed Private Property.

1 in 3 Millennials (32%) also seek to purchase a luxury property in the long run, with the majority citing this purchase as a dependable long-term investment (66%). Other reasons include its convenience (42%), privacy (38%), social status (30%), and facilities (29%).

“There is no doubt that Millennials in Singapore are one of today’s fastest-growing segment of home buyers, with savings accumulated from pandemic sheltering. The delay in homebuying can also be due to Millennials’ increasing preference for a larger, luxury property that command higher prices than typical starter homes. While investing in property for capital growth is appealing, Millennials should exercise prudence and take the time to properly right-size their home ownership expectations based on their housing needs and financial situation as there is still considerable uncertainty in the economy,” said Dr. Tan.

Spoilt for choice, Singaporeans opt for more “conservative” home loans

More Singaporeans are opting for HDB loans (33%) when looking for a new home, an 11% increase from H2 2020. This preferential gap widens amongst Millennials, with 2 in 5 opting for HDB loans (41%) over bank loans (59%). However, bank loans are still the general preference for majority of Singaporeans, amongst 59% of Millennials, 76% of Generation X, and 72% of Baby Boomers.

Among those who prefer HDB loans, top reasons include feeling more secure in the event of a late repayment (31%), considering themselves less financially savvy to refinance their loans (29%), and believing that they would get a better deal from taking an HDB loan compared to a bank loan (24%).

This decision to finance their home with an HDB loan compared to a bank loan could also be due to the overwhelming number of loan options to choose from. When looking for a new bank loan, 50% of Singaporeans spend most of their time comparing bank loans. 20% of these homeowners also spend time searching for more information about bank loans to make an informed choice.

Paul Wee, Managing Director of FinTech, PropertyGuru Group, said, “The abundance of loan options available can be daunting for most homeowners. It complicates the decision-making process, pushing them into a kind of decision paralysis where they stick to the most straightforward and safest option, like a HDB loan or a loan package with the lowest interest rate. This may not necessarily be the best option for everyone as one can easily overlook other important factors to consider such as one’s preferred loan tenure and current financial situation. There is no harm in seeking a second opinion, especially given the myriad of free online mortgage platforms or independent home loan experts and tools to help homeowners simplify this process.”

About PropertyGuru’s Consumer Sentiment Study

About PropertyGuru Singapore

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 2021 Consumer Sentiment Study polled 1,012 Singaporeans, and the study was carried out online between 28 May and 4 July 2021.Launched in 2007, PropertyGuru.com.sg continues to be the No.1 property marketplace in Singapore. With currently more than 5 million monthly visits* and 75%** market share, PropertyGuru is the preferred destination for property seekers to find, finance and own their dream home. PropertyGuru.com.sg transformed the way Singaporeans find homes by taking property online and has since been helping them make confident property decisions. In 2020, PropertyGuru launched mortgage marketplace PropertyGuru Finance offering the best loans and home advisory services to Singaporeans.

For more information about PropertyGuru, please visit PropertyGuru.com.sg and PropertyGuruGroup.com, or our social media pages on Facebook, Instagram, Twitter, YouTube and LinkedIn.

About PropertyGuru Group

PropertyGuru Group is Southeast Asia’s leading property technology company[2] and the preferred destination for 37 million property seekers to find their dream home, every month. PropertyGuru and its group companies empower property seekers with more than 2.8 million real estate listings, in-depth insights, and solutions that enable them to make confident property decisions across Singapore, Malaysia, Thailand, Indonesia, and Vietnam. PropertyGuru.com.sg was launched in 2007 and has helped to drive the Singapore property market online and has made property search transparent for the property seeker. Over the decade, the Group has grown into a high-growth technology company with a robust portfolio of leading property portals across its core markets.3]; award-winning mobile apps; a high-quality developer sales enablement platform, FastKey; mortgage marketplace PropertyGuru Finance; and a host of other property offerings including Awards, events, and publications across Asia.