iProperty Group recently conducted the first cross-market online property survey of its kind revealing a positive view on Asia’s property market by investors in Malaysia, Hong Kong, Indonesia and Singapore, despite the current economic state around the globe.
The survey was answered by nearly 8,500 respondents, mostly between the ages of 26 and 50 years, from executive/managerial and professional occupations, with an annual income above the national average.
“The survey findings revealed interesting and valuable insights on how consumers from these four countries viewed the property market. While we saw similarities across these markets, there were also some notable differences,” said Shaun Di Gregorio, CEO of the iProperty Group at the launch of the survey findings.
Across the four countries surveyed, key similarities were revealed among the participants of the research:
However, in Hong Kong, while price and location were the key factors of consideration, it was interesting to note that the political and economic climate were also a key consideration.
“Given that the political scene in Hong Kong remains uncertain until March 25, where the election will determine the new chief executive, it was no surprise that the political and economic climate was taken into account,” said Di Gregorio.
However, despite this, the survey findings showed that 53% of survey respondents in Hong Kong were still considering purchases during the first half of 2012 with 57.9% considered ownership of property their main motivation to purchase. Furthermore, the post-election landscape will present new opportunities for property investors.
When it came down to what type of property these survey respondents preferred, the survey findings showed that landed property was the most popular type of property that respondents in Malaysia (74.5%) and Hong Kong (90.4%) favoured. In Singapore, the survey revealed that private condominiums were the most popular type of property, while houses were the most popular in Indonesia for 68.9% and 77.8% of those surveyed respectively.
“Landed property has long been properties favoured by various investors over the course of time and the market for landed property continues to be the favorite. The main reason - as development and resident population rapidly grows, land tends to grow scarce, hence the more expensive prime land becomes,” said Di Gregorio.
This phenomenon can be seen in Singapore, where the cost of owning landed property is overwhelmingly high, therefore making private condominiums the favorite amongst Singaporeans.
Due to this, it was not surprising that the survey findings revealed nearly 42.2% of Singaporeans surveyed were keen in investing in properties in Malaysia and Australia. In Hong Kong, a mere 15.3% considered buying property overseas. Of those interested in the overseas property market, interest was split across much overseas location, with China being the favourite.
‘With the currency exchange working in their favour, Singaporeans are able to purchase landed properties in these countries, making it a good investment, since the findings also showed that 39.4% of those surveyed cited retirement or migration as being the main motivation for buying overseas property,” said Di Gregorio.
An Asian Overview – Property Outlook 2012 in Malaysia, Hong Kong, Indonesia and Singapore
Di Gregorio said that the findings showed that Malaysians had good reasons to be upbeat about the property market which he attributed to several factors such as the low mortgage interest rates (as low as BLR minus 2.4%), financing of up to 100%, no lock in period, stamp duty exemptions and long repayments periods, up to 30 years, or until age 75, contribute significantly in making Malaysia a buyer friendly market.
Another key factor that stood out from the survey findings that indicated that Malaysia had a buying friendly environment was that over 40% of Malaysians surveyed owned two or more properties, a higher proportion than in any other country.
With Malaysia being ranked fourth in the list of World’s Best Retirement Havens in the International Living’s 2012 Retirement Index and together with the scheme “Malaysia My Second Home Programme,” Malaysia has since been attracting the interest of foreigners.
On the Hong Kong front, the country is the stage for some of the most intense property speculation in the region, owing to low interest rates and strong economic growth. Speculators from Mainland China is believed to make-up about one-quarter of new property buyers.
The Government’s efforts to cool down the overheated property market, house prices continue to grow at double digit rates. Despite this, the survey revealed that respondents were cautiously optimistic about the property market and that the Hong Kong Special Administrative Region government’s recent measures to cool the over-heated property market are likely to have little impact on their purchasing decisions.
Moving on to the Indonesia property market, the survey revealed that it had an optimistic outlook. The findings showed that 77.7% of respondents were confident that the Indonesian property market was holding up well despite the threat of a global recession. The biggest concerns that respondents had about the property market was errant developers and the quality of developers. Consumer buying power relative to rising house prices was also a concern, as were home financing policies and interest rates.
Interestingly, the survey also showed that 69.3% of respondents didn’t think that there was a property bubble in Indonesia while 20.6% said yes and the remaining 10.1% were undecided.
When asked about the property market in Singapore, Di Gregorio explained that respondents in Singapore were positive about the property market with 68% planning on buying property in the next 6 – 12 months.
The Singapore government maintains strict control of land and housing, and has implemented tight curbs on property speculation in an effort to avoid a property bubble in which 53.8% of respondents felt that there was.
More than half (59.6%) of respondents conquered that the recent cooling measured that restricts Singaporeans and Permanent Residents from ownership of private property is they also owned a HDB flat, and only after fulfilling the Minimum Occupancy Period (MOP) of five years, was a good step taken by the government.
A majority (61.4%) also felt that the raised income ceiling for ownership of HDB flats and executive condominiums would results in more competition for public housing.
In conclusion, Di Gregorio said that, “The survey report offered us valuable insights of the property market and the findings also showed us that consumers in these countries while reaming cautious, still remained positive. It showed that the property market is very strong but consumers are still cautious. We trust that this report will be highly beneficial to not only consumers, but also to developers, real-estate agents and local and international property buyers, who are looking to gauge the sentiments of the Asian property market from an unbiased perspective.”
As one of the preferred property portals in the area, reaching over 3 million property investors on a monthly basis, 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) as a bellwether to gauge the opinions of thousands of consumers in the region.