The iProperty Group leveraged on their market leading websites in Malaysia (iproperty.com.my), Hong Kong (GoHome.com.hk), Indonesia (Rumah123.com and rumahdanproperti.com) and Singapore (iproperty.com.sg) to gauge the opinions of consumers on the property market.
The iProperty.com Asia Property Market Sentiment Survey was carried out for a month in July and attracted over 25,000 participants. The majority of the survey respondents were between 26 and 50 years of age and mainly held executive/managerial and professional level positions with an annual income above the national average.
- The majority of all respondents in each country have occupied their current premises for less than five years.
The survey reveals that many respondents aspire to upgrade their current living conditions once every five years on average.
- Location was the highest rated factor for respondents in Malaysia, Indonesia and Singapore. Respondents in Hong Kong, however, rated price to be most important factor in determining the purchase of property.
Similar to the previous survey findings, location and price were still the two key factors that survey respondents viewed as important, ahead of political/economic climate, when deciding to purchase a property.
“In Malaysia, Singapore and Indonesia, location trumped price whereas respondents in Hong Kong viewed price to be the key factor. In the property industry, location and price are the most important factors that any property buyer and investor should look into before embarking on what is said to be their biggest investment,” elaborated Shaun Di Gregorio, CEO of the iProperty Group.
- Landed property is the top preference for respondents in Malaysia and Indonesia, while respondents in Hong Kong and Singapore opted for private condominiums/serviced apartments as their property of interest.
- Affordability and rising house prices continue to remain the biggest concerns for survey respondents in all four markets.
- Respondents from Singapore and Indonesia were more interested to invest in property overseas compared to respondents from Malaysia and Hong Kong.
It was not surprising that the survey findings revealed that 38% of Singaporeans surveyed were keen to invest in properties overseas, with a majority citing Malaysia (33%) and Australia (19%) as their top investment destination.
Respondents in Indonesia (32%) were the second highest group to express strong interest in overseas property with 82% intending to purchase in the next six to 12 months.
In Hong Kong, 15% of the respondents who were keen in investing overseas, 24% cited China as their preferred destination with 43% citing migration or retirement as the main reason of investment.
An Asian Overview
- Malaysia Continues to be a Buyer Friendly Market
The Malaysian real estate is in tandem with the continued growth in the economy and despite expectations of a slowdown during the second half of the year; the property market has seen a substantial increase in the volume of transactions in the residential property sector.
Just over half (52%) of the Malaysian respondents considered the current economic and political climate to be conducive to property investment and it was interesting to note that a whopping 51% of respondents believed that more should be done to protect property buyers.
Due to the loan-to-value ratio of 70%, consumers are likely to maintain a cautious approach in purchasing high end properties, with over 70% stating that their budget for property investment was under RM500,000.
- Indonesia – An Emerging Market
The new regulations imposed by the Indonesian government to set a maximum loan-to-value ratio for housing loans at 70% to prevent a property bubble in unlikely to dampen demand.
The Indonesian property market is set to remain stable through the next few months due to the growing middle class population with increased purchasing power. 82% of survey respondents have the intention to buy property in the next 6-12 months, clearly reflecting their optimism on home ownership in the near future.
72% of those surveyed stated that their main motivation to purchase was to own their property, with 63% reflecting that they had a budget below IDR200 million.
Similar to the other countries, affordability and rising house prices was a major concern for respondents.
- Hong Kong – Desires to Purchase Properties but Unconscious of Risk
Hong Kong respondents hold a positive view of residential property market prospects which increased by a percentage of 16 compared with the previous survey conducted at the beginning of the year. More than half of these respondents (58%) expect a stable or an acceptable rise in property prices in the second half of the year.
The survey findings indicate that Hong Kong people are optimistic about the local property market for the second half of the year, even as prices of private properties hit new record highs in the second quarter of the year. Amidst today’s soaring property prices, members of the post-80’s generation desire to own properties yet are inadequately conscious about the possible negative elements of the property market.
- Singapore – A Resilient Market
Following the introduction of the Additional Buyer’s Stamp Duty (ABSD), introduced in December and the discontinuation of the Financial Investor Scheme in late April 2012, there has been a surge in foreign investment.
In a report published by the Business Times, Malaysian investors comprised the largest percentage of foreign buyers in Q2 2012. Other major investors include Indonesians (4.7%), mainland Chinese (4.4%), and Indian nationals (3.0%).
The sentiments also showed that the Singapore real estate sector continues to remain resilient thanks to strong demand from a growing population and low borrowing rates.
Shedding light on these survey findings, Di Gregorio said, “The survey findings revealed interesting and valuable insights on how consumers from these four countries viewed the property market. It also gave a point of reference to gauge how consumers viewed the property market compared to the beginning of the year. While some findings remained the same, there were also some notable differences.”
He added that the survey report offered us valuable insights into the property market and the findings also showed us that consumers in these countries are cautious and are adopting a wait-and-see approach to property investment. Their investment budgets in all these countries are also not relatively high, with majority not willing to purchase high end properties or investments.
“We advise all property buyers and investors to consider all factors including affordability and financial gap as the market volatility and uncertain economic situation could incur investment hurdles,” concluded Di Gregorio.