The latest consumer sentiment survey by the PropertyGuru showed that the attitude of Singapore property owners and seekers towards affordability has improved in the second half of 2017.
According to the survey, the property affordability sentiment has taken a positive turn, up by five points from 29 in 1H17 to 34 in 2H17.
The score is derived from the measurement of consumer perception of the current real estate situation, including several factors like the outlook on the interest rate, perceived efforts by the government, and the projected upswing of prices in the next five years.
PropertyGuru said the improvement in the sentiment score was due to the strong property price expectations, with 46 percent of respondents claiming that they have an optimistic outlook on property prices across all property types.
This, in turn, has led to the overall consumer satisfaction to remain stable, with a slight improvement of three percentage points to 37 percent. Nearly half of the respondents indicated that the prospects for capital appreciation as the reasons for their satisfaction.
The low mortgage and interest rates and the perception of a stable and resilient property market helped boost the overall consumer sentiment.
However, six out of 10 respondents said expensive and overpriced properties are still the reason why they are unsatisfied with the current conditions of the market. PropertyGuru said private property prices saw a 0.5 percent uptick in 2017 after a four-year downtrend.
"With more aggressive developer bids and an increased volume in transactions, home prices in the private property market are expected to continue to increase," PropertyGuru said.
While the consumer affordability sentiment has improved, the intent to purchase remained unchanged at 49 percent. It also seems like Singaporeans are losing interest in purchasing HDB flats as more prefer to grab a private landed and non-landed properties over the next five years.
PropertyGuru said the overwhelming collective sales in the past year which amounted to more than S$6 billion played a crucial role in improving the consumer intent to purchase for private and landed properties.
PropertyGuru CEO Hari Krishnan commented on the survey results and said consumers need to practice prudence moving forward this year.
"With the market poised to bounce back over the course of 2018, consumers are also expressing greater optimism and satisfaction. Purchase intent for private properties is on the rise as consumers look to catch the next crest of the property cycle. However, those looking at investment properties should continue to keep an eye on vacancy rates and be wary of overstretching on finances," he said.