32% of home buyers skeptical on public housing market

They think prices will never stabilize and that the government needs to do something about it soon.

iProperty.com's poll, conducted from August to November this year, asked respondents for their opinions on whether public housing prices will stabilise within the next three to five years – as mentioned by Minister for National Development Khaw Boon Wan earlier this year. 1,033 participants responded to the poll.

Key findings as follows:

1. More than a third of respondents (36.9%) believe that three to five years is a fair assessment for public housing prices to stabilise.

2. Trailing slightly behind are 31.9% of respondents who, on the other hand, think that prices will never stabilise and more radical measures need to be taken.

3. 19.9% of respondents think that the government is doing a stellar job and prices will stabilise over the next 1 to 2 years.

4. 11.3% thinks approximately 5 to 7 years is needed for prices to stabilise.

From the findings, it can be seen that a clear majority – 56.8% - are of the opinion that the government is either on track or will likely exceed expectations on their three-to-five year projection to cool the public housing market.

However, a significant minority – 43.2% - remain skeptical that public housing prices will stabilise in the timeframe put forward. Further to this, a large portion of this group – 31.9% of respondents - appear unconvinced of the current measures adopted by the government and feel further action needs to be taken.

Much of the positive sentiment can be attributed to the range of measures and plans the government had rolled out in the second half of the year. These measures include a series of new Built-to-Order launches in July, September and November, injecting several thousand new units into the market. These include developments in highly-coveted mature estates such as Bedok, Yishun and Hougang. Complementing this were recent announcements made to enhance chances for repeat applicants bidding for new units, lifting of the income ceiling for Executive Condominiums, and for Barrier-Free Accessibility features to be made available across all HDB estates by the end of December 2011.

“The findings of our Poll paint an encouraging picture, showing that measures taken by the government have borne some fruit,” said Shaun Di Gregorio, Chief Executive Officer of iProperty Group Limited. “However, as encouraging as these numbers are, we should also not forget that there is still a significant level of dissatisfaction still pervading the market.”

Referring in particular to the 31.9% of respondents who said that prices will never stabilise, Shaun Di Gregorio said that what the government does in the next six to 12 months will be crucial in winning over this group of skeptics. Key issues that may have contributed to this outlook include the pricing of units under the Design, Build and Sell Scheme and exceptionally high cash-over-valuation figures for some highly sought-after resale units.

“Affordability and lack of suitable options will continue to be the two most important factors for home buyers. While we are seeing a gradually-increasing level of positivity in the market, other concerns, such as the still-increasing price of property and fears of a potential economic downturn in 2012, will be key considerations that may mean the difference between a positive and less-than-positive 2012 for potential home buyers,” he added.