Affordability, financing now top concerns for homebuyers: ERA survey
Cautious sentiment has led to a softening in new home sales in the first six months of 2024
AFFORDABILITY is top of mind for those looking to buy a home in Singapore today, according to a survey by ERA.
One quarter of those polled by the real estate agency said they were concerned about home prices, while 16 per cent said it is difficult to secure a larger loan.
Some 16 per cent of respondents also expressed concerns over interest rates and how they have affected affordability. And 17 per cent said that higher interest rates, as well as property tax, make it difficult to own an investment property.
The poll findings reflect the cautious sentiment among buyers that has led to a softening in new home sales in the first six months of 2024, ERA said, driven by economic challenges and elevated interest rates. Expected rate cuts by the Federal Reserve could spur homebuying if financing terms ease.
The survey, conducted between June and July 2024 by ERA in partnership with Ngee Ann Polytechnic’s School of Design and Environment, involved 1,737 participants across four generational cohorts – Gen Z (those aged between 21 and 27 years old), millennials (those aged between 28 and 43 years old), Gen X (those aged between 44 and 59 years old), and seniors above the age of 60.
Respondents were asked about their homebuying preferences, residential needs, housing budgets and property aspirations.
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Some 61 per cent of homebuyers surveyed agree that the Housing and Development Board’s (HDB) Build-To-Order flats remain an affordable option.
In response to queries from The Business Times, ERA said 29 per cent of the respondents surveyed were neutral about the affordability of BTO flats. The remaining 10 per cent disagreed.
For HDB resale flats, 32 per cent of the respondents agreed they were affordable. Another 32 per cent disagreed they were affordable, while the remaining 36 per cent were neutral about the affordability of resale flats, ERA said.
Meanwhile, 45 per cent of those surveyed either agreed or were neutral on the affordability of new and resale private homes. The remaining 55 per cent disagreed that private homes were affordable.
Despite affordability challenges, 34 per cent of those surveyed still aspire to own a private condominium, and 7 per cent said they are eyeing landed property.
Eleven per cent are aiming to buy an executive condominium, while the remaining 48 per cent want to buy either a BTO or resale flat.
Among those looking to buy a condo, 58 per cent have a budget of between S$1 million and S$2 million, which is the range at which two-bedroom condos in the Outside Central Region are currently priced, ERA noted. Another 20 per cent of respondents said they have a budget of between S$2 million and S$3 million for a private home purchase.
By cohort, 59 per cent of Gen Zs surveyed are aiming to buy a BTO flat as their first home, while 23 per cent said they are eyeing a resale flat. Almost three in five of the Gen Zs polled aspire to upgrade to a new private condo in the next three to five years.
About one-third of the millennials surveyed are looking to buy a condo.
Among all cohorts, Gen X showed the strongest interest in purchasing private property, with 37 per cent indicating this choice.
Slightly over half, or 54 per cent of seniors polled, intend to purchase another property, but this interest may be driven by a desire to right-size, ERA said.
“As Singaporeans navigate the evolving landscape of home ownership, their perceptions, preferences and pressures they face will continue to shape their housing decisions,” ERA chief executive officer Marcus Chu said.
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