34% of Singaporeans won’t buy properties due to high prices

And 73% of HDB seekers are willing to wait 2 to 3 years to purchase property.

PropertyGuru revealed its second quarter 2011 survey results on property market sentiment amongst Singaporeans. The survey shows that home buyers and property investors are less optimistic about property affordability as compared to Q1 2011. 79% of respondents perceive property in all categories in Singapore as expensive, up from 75% in Q1.

First Time Buyers

PropertyGuru’s latest quarterly survey conducted in June 2011 featured over 2,200 respondents and for the first time, has a separate analysis on first-time home buyers. 70% of first time buyers are between 25 – 34 years of age while 36% of them have a monthly household income of between $4,000 - $8,000.

Of this figure, 48% are interested in purchasing HDB flats and a surprisingly high 42% are interested in purchasing completed condominiums. 64% of first time buyers who are looking to purchase HDB flats prefer resale flats compared to BTO flats, presumably due to time to move in.

Almost 50% of all first time home buyers started their property search process 7 to 18 months ago. Factors like price (35%), location (29%), limited supply (12%) and selection process (11%) were the main reasons cited as affecting time taken to purchase their first home. 50% of the first time buyers started searching for property 7 months to 1.5 years ago. 73% of HDB seekers are willing to wait 2 to 3 years to purchase property while 68% of Condominium seekers are willing to wait 1 to 2 years.

Highlights of the PropertyGuru Affordability Sentiment Survey

The key findings of the PropertyGuru Affordability Sentiment survey include:

The consumer property sentiment index for Second Quarter 2011 is 2.6 on a scale of 5, versus 2.8 in our Q1 2011 survey, a drop of 0.2 points. This shows that consumers are concerned about rising property prices, despite recent cooling measures announced earlier this year.

• More people (79%) feel that property in all categories in Singapore is expensive compared to 75% in our Q1 survey. 34% will not make purchases due to the high prices.

•63% of respondents are of the view that HDB prices may continue to increase in the next 6 months, compared to 56% in Q1, an increase of 7 percentage points.

•58% felt that HDB cash-over-valuation for resale HDB flats would continue to increase over the next 12 months – despite the recent significant increase in BTO flats.

•Over half of those surveyed (54%) feel transactions across all property types would increase in the next 6 months, compared to 44% in Q1, an increase of 10 percentage points.

•Overall, there is less optimism towards government interventions. As much as 57% feel that our government is not doing enough to stabilise the property market, compared to 48% in our Q1 survey, an increase of almost 10 percentage points in pessimism.

•Condominiums are viewed as the most attractive (48%) type of property.

“Our latest quarterly survey gives an interesting insight into current sentiment towards the property market. Whilst consumers remain bullish about rising market prices, they are increasingly concerned about affordability, adopting a ‘wait and see’ approach and would like the Government to take further actions. As a result, we can expect buyers to be more discerning, intensifying their search before making a purchase. PropertyGuru addresses this need by providing the largest database of available property for sale or rent,” stated Steve Melhuish, PropertyGuru Group CEO.