Most expect home prices to fall or stabilise: Poll

Most people think the once-soaring property market here has been reined in, according to a recent poll.

Almost three-quarters expect residential prices to stay the same or fall in the next six months, based on the survey by real estate firm ERA Realty and research firm Nexus Link.

Almost four in 10 expect residential property prices to fall in the next six months, while another one-third of respondents expect prices to stay the same.

Only a quarter think prices might rise, with younger people and four-room flat owners most likely to think so.

Despite this cool sentiment, ERA Realty key executive officer Eugene Lim said: "We do not see the results as negative." The impact of government cooling measures is being felt, but these aim to stabilise prices rather than cause a huge drop, he added.

Property prices had been on the rise since 2009, but started falling in the second half of last year for public flats, and at the start of this year for private units.

In this cooling market, 38.5 per cent of respondents think prices will fall in the next six months. Another 35.6 per cent think they will stay the same.

Expectations are similar for the longer term, with 33.8 per cent and 39.7 per cent expecting prices to be lower or the same in a year's time, respectively.

The 21-to-34 age group was the only one where more people expected higher prices.

Younger buyers might be less aware of market dynamics as they have limited investment experience, said R'ST Research director Ong Kah Seng.

Similarly, four-room flat owners were the only group where more people thought that prices would rise rather than fall.

The face-to-face poll was conducted from late September till late October with a representative sample of 500 citizens and permanent residents.

Respondents were also asked about their awareness of property cooling measures. Seven in 10 knew at least one, but less than a fifth were aware of all six.

Two loan curbs were the least known: total debt servicing ratio and the mortgage servicing ratio.

These limit a borrower's total debt and the share of income that can be used to service a home loan, respectively.

The apparent ignorance of these measures could simply be an issue of not recognising the terms, said Mr Colin Tan, Suntec Real Estate Consultants director of research and consultancy. "Most people know and understand banks don't lend as much (now)."

The results show that ERA must make sure its salesmen are able to advise sellers and buyers on these "mind-boggling" measures, said Mr Lim.

Respondents were also asked about the lease buyback scheme which lets elderly HDB owners sell part of their lease back to the Government for retirement income. More than seven in 10 had heard about it, but few were keen.

Of those who knew about it, less than a quarter would recommend an eligible relative or friend to take it up. Four in 10 would not, and the rest were neutral.

janiceh@sph.com.sg

This article was first published on Dec 15, 2014.
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