Home buyers undaunted by cooling measures, most will not defer property purchase year: PropNex

Private property prices in Singapore may not decline in 2023, according to a Home Buyers’ Survey report by PropNex Realty. The survey was conducted after private home prices had gone up 3.3% in 1Q2023 and 8.6% in 2022. Around 56% of the 450 prospective home buyers surveyed do not plan to defer their property purchase this year in spite of market uncertainties and a new round of property cooling measures, with 48.8% of those who will put their purchase decision on hold citing higher property prices as the main deterrent.

The survey also showed that most of the respondents own at least one property, with 23.7% saying they do not currently own any property. An overwhelming 83% of respondents do not think that private property prices will fall in 2023, while 56% do not expect HDB prices to decline this year either.

When it comes to consumer preferences, 36% of respondents cite a housing budget of $1 million to $1.5 million, while 24% of them are comfortable with homes priced between $1.5 million and $2 million. Most prospective buyers favour homes spanning from 800 sq ft to 1,200 sq ft, with the pricing of homes potentially ranging from $1,660 psf and $2,500 psf to keep the overall quantum under $2 million.

Furthermore, proximity to key transport nodes, amenities, as well as workplaces and commercial hubs are highly valued by respondents. 80% of respondents agree that green features are important in a home or housing development, but they are not as ready to pay much of a price premium for such features.

Sitting at the heart of the Greater Western Region and accessible from both the Pan Island Expressway and the Bukit Timah Expressway, Bukit Batok Town EC offers its residents convenience living. With a variety of amenities and infrastructure around the site, the development is ideal for young families and couples who are looking for a quality home while taking advantage of its location. Inside, the development boasts of common recreation facilities such as a a 50m lap pool, gymnasium, communal lounge, and BBQ pavilion.

Ismail Gafoor, CEO of PropNex, believes that these property cooling measures and higher interest rates have contributed to a more measured price movement in 2Q2023, and will ultimately benefit consumers. He adds that, “with home buyers’ budget being relatively inelastic in the near term, we believe many developers will price units in tune with prevailing market sentiment”.

Wong Siew Ying, head of research and content at PropNex, says that the harmonisation of floor area definitions by the government in September last year will likely lead to a reduction in total saleable area for condo projects, as well as impact developer’s overall breakeven cost. This will have a trickle-down effect on the private and public resale markets, as the higher cost of replacement homes will lead to firmer asking prices by homeowners.