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Sep 19, 2010
More keen on buying homes: Poll

Survey shows higher interest after cooling measures; many expect prices to stabilise or fall
By Joyce Teo

A Savills Singapore survey has found that more people are keen on buying a home in the next six months after the Government announced measures to cool the property market on Aug 30.

The property consultancy said this could be because more respondents now expect prices to stabilise or fall.

Savills conducted two separate surveys involving 200 respondents each - one four weeks before the measures were introduced and one right after.

More than 90 per cent of the respondents in both surveys are in the 21-59 age group. About two-thirds of them own Housing Board (HDB) flats.

Savills said the number of people who would consider buying a property post-measures rose by 20 percentage points, from 14 per cent to 34 per cent.

Although 80 per cent of the respondents still feel that Singapore's home prices are high, a bigger group than before now believes prices will fall.

Some 45 per cent of the respondents expect home prices to fall after the implementation of the measures, compared with 15 per cent before the measures were announced.

A much smaller group than before - 26 per cent of the respondents compared with 62 per cent previously - expect prices to continue to rise.

The new cooling measures include tighter lending rules for those with existing mortgages looking to buy another property. They can now borrow up to only 70 per cent of the property's value, down from 80 per cent.

Also, those who buy an HDB resale flat on or after Aug 30 must sell their private property - including any held overseas - within six months of the purchase.

The housing market had resisted two earlier rounds of cooling measures - in September last year and in February this year. The measures included doing away with the interest absorption scheme and the imposition of a stamp duty for those who sell their property within a year of buying it.

Private home prices have surged since the middle of last year while HDB resale prices have continued to reach new quarterly highs since 2008.

For a start, property experts expect the new measures to slow home sales for the rest of the year. Already, the impact can be felt in the HDB and private resale markets, they said.

Cushman and Wakefield's senior manager of research, Asia-Pacific, Mr Ong Kah Seng, said the slowdown in the private market will be most evident in the suburban areas as the government measures are targeted at stabilising prices of mass-market private homes.

The softening of the market may signal a buying opportunity for some people, said Savills.

However, nearly half of the respondents - down nine percentage points from 57 per cent - said they would still not consider buying a property.

'These people may be cautious about entering the market now and prefer to take a step back to assess the market impact of the new measures first before making a decision,' said Savills' senior manager, research and consultancy, Ms Christine Sun.

The other reason is that they do not need a home in the next six months, she said.

The survey also found that more repeat buyers than first-time buyers perceived that there was ample housing supply for them.

'This could be due to the tight supply in the public housing market, which is predominantly the domain of first-time buyers,' said Ms Sun.

As the Government plans to raise the supply of new HDB flats from more than 16,000 this year to as many as 22,000 next year, this perception of first-time buyers may change, she said.

And with the new measures, more buyers - apart from repeat buyers - felt more confident entering the property market in the next six months, Savills said.

Some respondents had commented that they were more willing to enter the market now, knowing that the Government was closely monitoring the situation and may do more to prevent any further price spikes or property bubble from forming, it said.

Others are also expecting more home options, given the huge upcoming supply in the private and public markets.

'These new measures may therefore sway some buyers who were sitting on the sidelines... to make a purchase in the next six months,' said Ms Sun.

'We can expect more rational buying in the coming months.'