SINGAPORE: Inflation may slow Singapore property market transactions. New research from PropertyGuru shows that more than two in four Singaporeans (55 percent) will most likely delay their plans to buy property, specifically an HDB flat, over fears concerning inflation. Moreover, 24 percent of Singaporeans say they are considering dropping their plans to buy a home altogether, impacting Singapore property prices.
This is based on the most recent bi-annual 2023 Consumer Sentiment Study (CSS) from the leading Singapore property website. PropertyGuru’s CSS measures the country’s property market’s current consumer sentiments and expectations.
The study’s overall Sentiment Index, which shows the present real estate satisfaction and overall climate, housing affordability, interest rates, perceived government efforts, and property prices, is now at 43 points, which had previously been at 45 points during the second half of 2022.
The factor that took the biggest hit is the affordability rating, which decreased by 15 points, from 58 to 43, which is probably why the overall score is now lower.
“More Singaporeans rate property prices at an expensive or too expensive level in H2 2022 – up 57 percent from 42 percent in H1 2022. An increased number of Singaporeans (37 percent) also feel that they are now somewhat unable or definitely unable to buy a property in H2 2022, compared to 25 percent in H1 2022,” PropertyGuru said on Mar 6.
The Singapore property market study shows that many Singaporeans (55 percent) are now rethinking their plans regarding buying property, at least until inflation drops and prices stabilize, with 24 percent saying they’re unlikely to purchase property at all.
Of those who participated in the study and who said they are considering buying property, 31 percent say they’re looking to buy an HDB BTO flat, whereas, in the first half of 2022, this figure had only been at 16 percent.
Moreover “67 percent of Singaporeans who intend to purchase an HDB BTO flat are drawn to the affordability of these properties,” PropertyGuru added.
Interestingly, this sentiment is strongest among younger Singaporeans (ages 22 to 29), 47 percent of whom gave this response, and lower-income individuals, half of whom said they feel this way.
PropertyGuru also noted that in spite of increasing concerns over affordability, there are Singaporeans who now accept the high prices of resale HDB flats. Nearly three in 10, or 29 percent, say it’s reasonable for these properties to be sold at a $1 million or an even higher price tag, with respondents aged 30 to 39 years old and in the high-income group mostly expressing this sentiment.
“Given the increase in marginal Buyer’s Stamp Duty (BSD) announced in Budget 2023, we expect property seekers searching for private residential homes between the $1.5 million to $2 million price range to pause and recalibrate their purchase preferences. They may even further ‘right size’ their accommodation choices or consider HDB resale flats, especially if they are first-time applicants due to the enhanced Central Provident Fund (CPF) Housing Grants available. They would now have more financial muscle towards purchasing the larger flat types such as four- or five-room flats,” said Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru.
/TISG
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