• Nearly 6 in 10 respondents do not plan to defer property purchase this year despite new cooling measures and market uncertainties
• Majority of those polled do not expect overall home prices to fall in 2023
• Buyers remain price conscious with pricing sweet-spot predominantly at $1 million to $1.5 million
• District 15 emerged as the most preferred location; ideal unit size favoured by respondents ranges from 800 sq ft to 1,200 sq ft
• Most respondents value eco-friendly features at home, but are unwilling to pay much price premium for them
07 August 2023, Singapore – PropNex Realty, the largest real estate agency in Singapore has today published its research report on home buyers’ sentiment and preferences. The report details the findings of a survey conducted by PropNex Research, after the tightening of the additional buyer’s stamp duty (ABSD) rates in April 2023. The survey polled more than 450 prospective home buyers who attended the company’s Property Wealth System (PWS) masterclass on 29 and 30 April 2023.
Despite a fresh round of cooling measures introduced in April 2023, about 56 per cent of the respondents indicated that they do not intend to defer buying a property in 2023, suggesting their confidence in the housing market. Meanwhile, 44 per cent said they would put their purchase decision on hold – with nearly half of them citing high property prices as a deterrent. The elevated interest rates and impact from the property cooling measures were the other top two reasons cited by respondents for the deferment of property purchase this year.
Wong Siew Ying, Head of Research and Content, PropNex, said, “When we conducted the survey in end-April, private home prices as tracked by the Urban Redevelopment Authority’s property price index was up by 3.3 per cent QOQ in Q1 2023. This, after having risen by 8.6 per cent in 2022 and 10.6 per cent in 2021. The strong price growth could have deterred some buyers from entering the market, particularly those with a tighter budget and are more sensitive to price increase. The findings showed that among the respondents who plan to shelf their property purchase decision this year, about 49 per cent of them cited high home prices as a key reason. In addition, many of the survey participants also expect home prices to remain firm this year.”
An overwhelming 83 per cent of those polled do not think private home prices will fall in 2023, while about 56 per cent of the survey respondents do not expect HDB resale 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 per cent for the overall private residential market, and a 5 to 6 per cent increase for HDB resale prices in the full-year 2023 – slowing substantially from the price gains in the last two years.
Ismail Gafoor, CEO of PropNex, said, “We saw a more measured price movement in Q2 2023, as the collective impact of various rounds of cooling measures and high interest rates continue to work through the market. This paves the way for more sustainable pricing and will ultimately benefit the consumers. Based on our survey, home buyers by and large are still price sensitive, with 36 per cent of respondents citing a housing budget of $1 million to $1.5 million, while 24 per cent of them are comfortable with homes priced in the range of $1.5 million to $2 million. With home buyers’ budget being relatively inelastic in the near-term, we believe many developers will price units in tune with prevailing market sentiment.”
PropNex’s survey findings showed that more than a quarter of the respondents feel that their current place of residence is too small. This presents a potential upgrading demand pool for resale properties as well as new launches, although the prices of new homes will limit the size of the unit that buyers can realistically afford. Many respondents favour homes spanning from 800 sq ft to 1,200 sq ft. This would roughly be equivalent to 3-bedroom and 3-bedroom premium units based on the sizes of new private homes on the market currently. Going by this preferred size range, the pricing of homes could hover from anything between $1,660 psf and $2,500 psf in order to keep the overall quantum to under $2 million.
Private housing (landed and non-landed) is the preferred housing type among the majority of the respondents, perhaps reflective of the aspirations of many Singaporean families to own and live in a private home. In particular, 51 per cent of the respondents said they prefer a new launch condo or new executive condo. Survey findings also showed that 84 per cent of the respondents believe that the value of new condominium units will generally appreciate at a faster pace compared to that of older resale properties over time.
Mr Gafoor added, “The resale market will continue to be the go-to segment for buyers who need move-in ready homes and those with more limited budget. Based on the caveats lodged, the median unit price ($PSF) gap between 99-year leasehold non-landed new private home sales and that of 99-year leasehold resale units in 1H 2023 was 67%. Despite the price gap, we still see many buyers willing to pay a premium for new units, owing to the fresh 99-year lease tenure, brand-new property and facilities, as well as the potential for capital growth due to the first-mover advantage – having purchased the units directly from developers.”
In terms of location, District 15 (Katong, Joo Chiat, Amber Road) garnered most votes, with about 13 per cent of respondents citing it as their most preferred location. District 15 tends to be a firm favourite among home buyers owing to its city fringe location and proximity to a wide range of amenities; the progressive opening of the Thomson-East Coast Line could also have helped to boost its appeal further. This is followed by District 19 (Serangoon Garden, Hougang, Punggol), and the prime District 10 (Ardmore, Bukit Timah, Holland Road, Tanglin).
“Unsurprisingly, the findings showed that proximity to key transport nodes, amenities, as well as workplaces and commercial hubs continue to be highly valued by respondents. In addition, with rising awareness of sustainability and the adoption of an eco-lifestyle, more than eight in 10 respondents agree that green features are important to varying degree in a home or housing development. However, they are not as ready to pay much price premium for having such features,” Ms. Wong added.
Nearly one-third of the respondents are not willing to pay any premium for eco-friendly features. while 49 per cent of those polled would pay no more than 5 per cent price premium for greener homes. Only two in 10 respondents said they are prepared to pay a price premium of more than 5 per cent to have eco-friendly features in their housing development.