Southeast Asia's real estate affordability sentiments still stuck in the doldrums

PropertyGuru's latest consumer sentiment study revealed that whilst there is a strong intent for consumers to acquire properties, affordability and satisfaction sentiments remained weak.

HDB flats in Singapore
Picture for representation Reuters

Property seekers across the Southeast Asian region are still concerned with their ability to afford homes, as shown in the latest regional consumer sentiment survey by the online property company, PropertyGuru.

According to the survey, consumers in Singapore, Malaysia, and Thailand remained pessimistic in terms of affordability in their respective real estate markets.

PropertyGuru Group CEO Hari Krishnan said only those in Indonesia showed positive attitudes in terms of having enough financial power to purchase a home.

"Southeast Asia is one of the fastest-growing real estate markets in the world, with Indonesia demonstrating the strongest optimism in purchase intentions and affordability sentiment among the countries surveyed. The property market in Indonesia is buoyed by a robust economic outlook and stable Rupiah," he explained.

The opposite, however, is happening in Singapore. Krishnan said whilst the intent to purchase property in the city-state remains strong, consumers are still bothered on their ability to do so.

"Even as the Singapore real estate market looks to recover in 2018, concerns with affordability are likely to continue to hobble the absorption of supply" he added.

This low affordability sentiment came with the declining overall satisfaction of these consumers. Out of all the four countries, Indonesians are still in the positive territory in terms of satisfaction. Those in the other three countries are on the dissatisfied side.

It should be noted, however, that the intent to purchase remained strong for the four countries. In fact, 60% of Indonesian respondents expressed the intention to purchase a property in the next six months.

In Malaysia, 52% claimed that they have plans to buy a property in the near future. At least 49% in Singapore and 43% in Thailand also said the same.

The study also noted that whilst Singaporean respondents are open to the idea of both new and resale homes, prospective homeowners in Malaysia, Indonesia and Thailand indicated a preference for new properties.

Across the region, location and perceived safety of the area are the key determining factors that affect property purchase decisions.