A consumer sentiment study reveals that financial constraints are leading young Singaporeans to prioritize renting over purchasing property.
A recent consumer sentiment study has revealed a significant trend: two-thirds, or 66 percent, of young Singaporeans are opting to rent rather than buy property.
The study, conducted by real estate portal PropertyGuru, found that respondents aged 22 to 29 prefer renting at this time due to insufficient savings.
Among the young participants, 21 percent cited current property prices as excessively high, leading them to focus on saving instead.
As a result of these sentiments, many are considering alternatives such as co-living or shared housing, which offer shared facilities at lower rental rates.
They indicated that fully furnished rooms and housekeeping services make co-living an attractive choice.
Among those who rent, 36 percent feel no rush to purchase property at present.
Overall, one in three respondents is experiencing the impact of rising rental prices but is unable to find a more affordable option than their current arrangement.
Additionally, 55 percent of respondents reported being affected by property tax changes.
The second key finding of the report relates to the motivation for seeking new homes. Nearly three-fourths, or 72 percent, of respondents plan to buy property within the next two years, with the need for more personal space cited as the primary reason (36 percent).
In 2021, only 27 percent mentioned this as their main motivation.
Among those indicating a desire for more personal space, 54 percent are aged 22 to 29, while 48 percent fall within the 30 to 39 age bracket.
Interestingly, the proportion of respondents intending to buy property for investment purposes decreased from 44 percent last year to 33 percent this year.
“The pandemic and the rise of hybrid work models have triggered a shift in consumer purchasing behavior. Our previous Consumer Sentiment Study for H1 2022 indicated that 42% of Singaporeans anticipated a higher demand for larger homes post-pandemic,” stated Dr. Tan Tee Khoon, Country Manager of PropertyGuru Singapore.
As remote work remains prevalent for many professionals in Singapore, property seekers increasingly seek larger living spaces. This surge in demand favors larger residential types and makes HDB resale flats more attractive than private residential homes due to their affordability,” Dr. Tan added.
Among those looking for new homes, 30 percent prefer HDB resale flats, 23 percent desire resale non-landed properties, and 6 percent opt for resale landed properties.
“Rare HDB flat types that offer spacious layouts, such as those under the Design, Build and Sell Scheme (DBSS), executive apartments, and maisonettes that are no longer being developed can command higher prices, with some exceeding the million-dollar mark. In an inflationary climate, a spacious HDB flat in a prime location priced at $1 million is a remarkable deal, contributing to the increase in million-dollar HDB transactions this year,” Dr. Tan elaborated.
The proportion of engaged couples wishing to purchase new flats has risen from 10 percent earlier this year to 22 percent.
Additionally, interest in new HDB Build-To-Order (BTO) launches saw an 8 percent increase late last year, climbing to 16 percent at the beginning of 2022.
