71% of Singaporeans say Singapore properties are too expensive

Majority of consumers also believe that the government can do more to manage property prices.

According to PropertyGuru's Affordability Sentiment Survey, majority of consumers are uncertain about the property market, with many adopting a 'wait-and-see' approach towards property purchases in the next 12 months.

The first quarter 2011 survey results is also the similar with the Q4 results. The consumer property sentiment index for Q1 2011 is 2.4 on a scale of 5. Compared to an index of 2.4 in our Q4 2010 survey, there is no shift in the affordability index. The index was 1.25 in Q2 2010.

71% of respondents still feel that property along all categories in Singapore is expensive, similar to the 71% in Q4. Similar to the Q4 survey, almost 68% of respondents feel that HDB is too expensive, showing still the same sentiment towards HDB. 80% of respondents consider Private Residential Property as still expensive. 56% are of the view that HDB prices will further increase in the next 6 months, compared to 41% in Q4. A fewer number of respondents (44%) feel the prices would decrease in the next 6 months, compared to the 59% in our Q4 2010 survey.

The biggest impact of the cooling measures: 40% of respondents feel condominium transactions would decrease. Overall, less respondents expect prices of commercial and private property to decrease in the next 6 months. Despite the recent cooling measures, 48% (almost half of the respondents) still feel the government is not doing enough to keep property prices in Singapore affordable as compared to the 41% in Q4.

“There is considerable ongoing debate about property affordability in the run up to the Singapore general elections. Our latest quarterly survey reveals that the majority of the 1,670 respondents still feel that the property market is too expensive with almost half wanting to see the Government doing more. In addition, an increased number (almost three-quarters of all respondents) are now adopting a ‘wait and see’ approach, presumably uncertain about the future of the market. Despite this, the January cooling measures seemed to have impacted sentiment towards the private residential market, more than HDB, with 40% expecting condo transactions to reduce and prices decrease by at least 5% within 12 months. We will see whether the latest Government measures
this month will impact sentiment in our Q2 survey, said Steve Melhuish, Group CEO of PropertyGuru.

Some of the other key findings of buying behaviour include:
• There is less appetite for Singapore properties, with the number of respondents who would purchase locally dropping to 62% in Q1, compared to 71% in Q4.

• More respondents now adopting a wait-and-see approach after the announcement of the cooling measures in January.

• Fewer respondents are looking to upgrade to better homes as the majority is neither interested in upgrading or downgrading.

• With the rising property prices in Singapore, more investors are seeking opportunities outside of Singapore. 42% of respondents now prefer property investments outside Singapore, compared to 39% in our Q4 survey.

• Top two motivation factors in purchase of property are price and location. Potential capital appreciation is the third most important factor but it has reduced in importance from 31% in Q4 to 22% in Q1.

• 68% say that ‘both myself and my spouse’ are the decision makers when purchasing property.