Sorry Singapore, Australia is top property destination for Southeast Asians

Singapore property prices just too expensive.

Southeast Asians are displaying a strong interest in Australia properties amidst growing concern over expensive domestic property prices in Singapore, Malaysia, Thailand and Indonesia, according to online property group PropertyGuru's latest South-East Asia property sentiment survey, the Property Affordability Index.

The Property Affordability Index is the quarterly benchmark for property affordability in PropertyGuru’s four key markets. It takes into account survey measurements for overall satisfaction, future price perceptions and intention to purchase property as well as perceived government effort.

Findings show that Australia continues to be a favourite investment and residential location for real estate for property seekers in all four countries. Out of 1,282 respondents who indicated intention to purchase overseas properties in the next six months, more than 3 out of 10 have highlighted Australia as their choice destination.

Chief motivation factors which influence the decision to invest include the perception that Australia properties garner higher rental yields and better capital appreciation (46%) as well as the perceived affordability of overseas homes based on comparatively cheaper prices (55%).

These results are consistent with current property buying trends, where the weakening Australian dollar, coupled with low interest rates and growing ­investor confidence, have spurred a surge of overseas buyers especially in cities like Melbourne and Sydney.

Demand is also driven largely by growing dissatisfaction about real estate in each market. In particular, 3 out of 4 respondents have highlighted overpriced properties and expectations of further property price increases as the main reason that fuels interest in overseas investments.

The exception is in Singapore, where despite prices for all property types are seen as costly, 40% of Singaporeans do not anticipate a further increase within the next 6 months as a result of the introduction of government policies on property in the country in Jan 2013.

“As South-East Asia becoming more affluent, increased property buying, selling and investing will inevitably drive property prices up and creates a ripple effect where investors will set their sights beyond their borders for cheaper alternatives,” mentioned Steve Melhuish, CEO of PropertyGuru Group. “Australia, being a perennial favourite, continues to be the hottest spot for the region at this moment with increased overseas buyer activity.”