iproperty.com asia property market sentiment report (h2) 2014

2

INDEX CEO’s Note ……………………………………………………………………………..…….........3

Executive Summary……………………………………………………………………………….5

Methodology, Assumptions and Caveats ………………………………………….…6

Results Analysis – Asia Overview ………………………………………………………..7

Malaysia ………………………………………………………………………………………..……..9

Demographics ……………………………………………………………………….....13

Overseas Property …………………………………………………………………….29

Sentiments ………………………………………………………………………………..35

Indonesia ………………………………..………………………………………………………….47

Demographics ………………………………………………………………………..…49

Overseas Property ………………………………………………………………….…63

Sentiments ………………………………………………………………………………..71

Hong Kong…………………..………………………………………………………………………84

Demographics …………………………………………………………………………..87

Overseas Property ………………………………………………………………….…94

Sentiments ………………………………………………………………………………..98

Singapore ………………………………………………………………………………………….103

Demographics …………………………………………………………………………106

Overseas Property ………………………………………………………………..…124

Sentiments ………………………………………………………………………………135

3

CEO’s NOTE We are once again pleased to share with you the findings of our sixth iProperty.com

Asia Property Market Sentiment Survey Report. This survey reveals sentiments for

the second half of 2014 while comparing the sentiments on the property market in

the first half of the year.

Conducted for a month, 5th June 2014 - 8th July 2014, across our market-leading

network of property portals, the survey gathered close to 13,000 respondents.

Cautious optimism seems to be the phrase that describes the Asian property market

in 2014. Despite economic upheavals, especially due to the tapering US economy,

capital flows have been somewhat steady in the Asian markets.

In all countries surveyed, affordability continues to remain a major concern. All these

countries have introduced multiple new measures to cool the property market

and/or are looking into providing more affordable housing to the low- and middle-

income group via various schemes.

We wish to thank all the survey respondents for sharing their valuable input on the

property market. Without the involvement of these many individuals, this report

would not have been possible.

Should you have any comments and feedback pertaining to this report, please drop

is an email at [email protected]

Sincerely,

Georg Chmiel

Managing Director and Chief Executive Officer

The iProperty Group

5

EXECUTIVE SUMMARY In the sixth iProperty.com Asia Property Market Sentiment Report for H2 of 2014,

survey respondents in Malaysia (iProperty.com.my), Indonesia (Rumah123.com and

rumahdanproperti.com), Hong Kong (GoHome.com.hk) and Singapore

(iProperty.com.sg) revealed their intentions, preferences and motivations in

acquiring property.

6

METHODOLOGY, ASSUMPTIONS

AND CAVEATS This is the sixth iProperty.com Asia Property Market Sentiment Survey Report

conducted by the iProperty Group. Held twice yearly, the survey aims to provide the

general public, property investors, buyers, sellers and owners, including local and

expatriates with insights into the property market purely from a consumer

perspective.

In Malaysia, a total of 5,295 people responded to the online survey.

In Indonesia, a total of 2,590 people responded to the online survey.

In Hong Kong, the survey gathered a total of 1,940 respondents. The survey was

designed and conducted in both English and Chinese on www.GoHome.com.hk.

In Singapore, a total of 2,805 people responded to the online survey.

The analysis of data from each survey question only considered data from questions

that were not skipped.

7

RESULTS ANALYSIS

Overview

Malaysia and Singapore have seen a slowdown in property sales, while Indonesia has

seen a surge in local demand rather than the capital inflows that spurred record

home prices in neighboring Singapore and Hong Kong.

Majority of respondents are male, and most are married. Most respondents in

Malaysia and Singapore are ‘Executives/Managers’, while most respondents in

Indonesia are ‘Clerks/Administrators’.

Most respondents have lived in their current place for less than 5 years and majority

have 4 or more living under the same roof. The main motivation of purchasing

property are the desire to own their own home, to attain rental income and for long-

term investment.

In all countries surveyed, concerns about affordability remain. A considerable

percentage of respondents:

• Have trouble finding property that they can afford, and have insufficient

funds for a downpayment

• Are looking to purchase property locally within the next year

• Picked Location, Price and Size as the three key factors to focus on when

purchasing property

For overseas property, most respondents would only consider purchasing 2 years

from now. Australia is consistently the second choice for property investment in all

countries surveyed. Respondents in Singapore and Malaysia prefer to purchase

‘Private condominiums / serviced apartment’, while Indonesia prefers to purchase

‘Landed property’ overseas. Similar to the previous survey, those who find overseas

property attractive are looking to purchase for investment and/or migratory

purposes.

8

Asia’s outlook

While mature markets like China, Japan and India have experienced certain highs

and lows, several new markets like Philippines, Indonesia and Malaysia have

emerged. According to Knight Frank Wealth Report 2014, global investment in

commercial property is expected to increase by 11% in 2014 and 2015 to USD$593

billion and USD$657 billion (RM2.1 trillion) respectively.

In Asia-Pacific, transaction volume rose nine percent to USD$119 billion (RM388

billion) in 2013, up from the one percent increase posted in 2012. In Asia-Pacific,

transaction volume rose 9% to USD$119 billion in 2013, up from the 1% increase

posted in 2012. Head of Research for Asia-Pacific at Knight Frank, noted that the

Asian economic slowdown has been more evident in the occupier markets.

In a Cushman & Wakefield publication, ‘Asia Pacific 2014 – 2015 Forecasts: Regaining

Momentum’, moderate growth forecasts for Asia Pacific in 2014-2015 remain intact.

Regional gross domestic product (GDP) growth is projected to remain solid at 5.4%-

5.5% this year and rebound to 5.5%-5.8% in 2015.

Inflation is also expected to remain benign across much of the region, except in India

and Indonesia, where monetary policy will remain tight to fend off inflationary

pressures.

The Southeast Asian economies of Indonesia, Malaysia, Philippines and Vietnam are

expected to grow more than 5% this year. Malaysia’s robust domestic demand will

remain crucial to maintaining its forward momentum, though sentiment is likely to

weaken following the implementation of the goods and services tax (GST) in 2015.

Indonesia will continue its underperformance as high interest rates and fuel prices

weigh on the economy. In Singapore, stable consumption, along with a pick-up in

exports, should allow the city-state to expand slightly above its projected long-term

trend rate (3.5%- 4%).

9

MALAYSIA: SLOWER MARKET

AMIDST ADJUSTMENT TO COOLING

MEASURES. A STRONGER SECOND

HALF IS EXPECTED, BUT THE LATEST

HIKE IN OPR IS EXPECTED TO LEND

A SLIGHT EFFECT.

The growth in the Malaysian House Price Index (MHPI) declined to 9.6% in the fourth

quarter of 2013, compared with 12.2% a year earlier, according to Bank Negara

Malaysia. This was the first time since the third quarter of 2011 that the MHPI was

below 10%, and the improvements were recorded across most states and most types

of dwelling.

Sales and new launches slowed in the last quarter of 2013, possibly due to the

various measures imposed to cool down the housing sector since 2010. Bank Negara

also said that it is possibly due to the wait-and-see attitude of some developers and

buyers following the prohibition on developer interest-bearing schemes in

November 2013, further increases in real property gains tax in January this year,

higher minimum purchase price for houses by foreigners, and uncertainties

regarding the potential impact of the goods and services tax.

Bank Negara said that although the MHPI had expanded annually by between 10%

and 12% since 2011, outpacing income and rental growth, the rate of growth in

house prices remained significantly below those observed in some neighbouring

economies.

Malaysia’s relatively young population and labour force, increasing urbanisation, and

general inclination to own a house, are factors that are expected to sustain strong

demand for affordable residential properties in major urban centres, likely

outstripping supply over the near and medium-term.

Bank Negara said the earlier government measures had also resulted in reduced

credit-fuelled speculative purchases of residential properties where the annual

growth in the number of borrowers with three or more outstanding housing loans

has declined substantially to about 4%, from a peak of 15.8% prior to the

implementation of the measures, to account for only 3% of housing loan borrowers.

10

A survey by chartered surveyor and international property consultants CH Williams

Talhar & Wong (WTW) showed that the outlook for the property sector in Malaysia,

particularly the residential and industrial sub-segments, is expected to remain robust

in 2014 despite a minor setback due to the government’s cooling measures like the

Real Property Gains Tax and Developer Interest Bearing Scheme. GST is not entirely

zero-rated for residential properties as there is uncertainty on how the government

will resolve the grey areas concerning residential projects.

An analyst with RHB Research Malaysia believes that property sector will recover in

the second half of 2014 (2H14) driven by a stronger 2014 gross domestic product

(GDP) growth outlook and the implementation of the goods and services tax (GST) in

April 2015. Maybank IB Research remains cautious on the sustainability of property

demand. In discussions with bankers, they revealed that the loan rejection rate has

been as high as 40% to 50% nowadays (depending on product types; affordable

housing dominated by first-time buyers has lower loan rejection rate) compared to

10-20% a year ago.

Maybank IB Research also warned that with many potential buyers still looking to

buy properties for investment purposes, further tightening measures could

negatively hit demand, and in greater force. According to the research house,

demands for landed property under MYR1mil remained firm but pointed out that

discussions with property agents revealed a significant slowdown in demand for

high-rise luxury properties.

Some consultants opine that the rush on property purchases will balance the slower

first-half of 2014 with stronger demand as many potential property buyers are

currently in a “wait and see” situation.

Raise in interest rates

On 10th July 2014, Bank Negara raised the overnight policy rate (OPR) for the first

time in three years by 25 basis point (bps) to 3.25%, aiming to curb rising inflation

and household debt. The floor and ceiling rates of the corridor for the overnight

policy rate are correspondingly raised to 3.00% and 3.50%, respectively.

In its latest analysis, the central bank described the prospects for the Malaysian

economy to remain firmly on a steady growth path. A 25 bps hike in OPR will have a

3% impact on monthly payments in the property sector, eroding housing

affordability amongst Malaysians.

11

Graphs show loan applications and approvals between 2006 to 2014

(SOURCE: Bank Negara)

A simulation study suggests that in the current base lending rate of minus 2.4%, a

MYR3,000 per month instalment amount will be able to afford a property worth

MYR681,000. A 25bps rate hike will reduce the affordable property price by 2.92% to

MYR662,000.

According to a senior executive of a real estate agency, an increase of 0.25% in the

overnight policy rate (OPR) will not have a significant impact on borrowers for low-

cost and affordable housing priced between MYR45,000 and MYR450,000.

Property consultants expect fewer transactions as mortgage rates will rise in tandem

with the interest rate.

13

DEMOGRAPHICS: MARRIED

COUPLES WITH INCREASED

BUDGET FOR BOTH LONG-TERM

PROPERTY INVESTMENT AND

OWN-HOME PURCHASE

There are more male respondents in this survey compared to the last survey, up

from 57% to 61%. As with the previous few surveys, the survey is male-skewed.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Male Female

61%

39%

Gender

14

In comparison with the previous survey, there is a huge increase in the percentage of

married respondents (from 41% to 54%), and this increase is directly from a drop in

respondents who are single (from 57% to 45%).

Most respondents are probably living with their spouse, their young children and/or

parents, as 55% of respondents have 4 or more people living in their household.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Married Single Other

54%

45%

1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

One Two Three Four More than

Four

7%

19% 20%25%

30%

Marital Status

No of People in a Household

15

As for the age groups, the numbers are similar to the previous survey. Respondents

are largely from 20 to 40 years old, and majority of respondents are Malaysian

citizens.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Below 20 20 - 30 31 - 40 41 - 50 51 and above

1%

37% 39%

14%9%

0% 20% 40% 60% 80% 100%

Citizen

Permanent Resident

Foreigner Residing in the Country

Non-resident in the country

91%

6%

1%

Age Group

Residence Status

16

Profession of respondents surveyed is consistent with the previous survey, where

most respondents are ‘Executives/Managers’, followed by ‘Professional/Technical’

and ‘Self-Employed’. The difference in percentage is rather insignificant.

Despite the upward percentage jump in married respondents, the household income

remains relatively unchanged. Majority of respondents (52%) fall into the

MYR90,000 and below group, while more than a quarter (27%) are from mid- to

upper middle-income group of MYR90,001 to MYR180,000. There is a slight increase

of those earning more than MYR300,000 (from approximately 3.4% to 5%).

0% 20% 40% 60% 80% 100%

Executive / Managerial

Professional / Technical

Self Employed

Sales

CEO / Senior Management

Clerical / Administrative

Civil Servant

Student

Retired

Homemaker

Unemployed

40%

25%

8%

8%

5%

4%

3%

3%

2%

1%

1%

0% 20% 40% 60% 80% 100%

Below MYR30,000

MYR30,001 - MYR90,000

MYR180,001 - MYR300,000

MYR300,001 - MYR500,000

More than MYR500,001

Prefer not to say

9%

43%

27%

3%

2%

7%

Profession

Annual Household Income

17

Back in March 2013, the 2012 Household Income Survey conducted by the Statistics

Department announced that the Malaysian households’ monthly income rose from

MYR4,025 in 2009 to MYR5,000 in 2012. It’s a 7.2% increase in total. It was even

announced that all states in Malaysia recorded better average monthly household

incomes with Kuala Lumpur leading with the highest growth of 14.9% from

MYR5,488 to MYR8,586. However, with the prices of everyday items rising, the

significance of this means very little as our spending power remains weak.

Most of respondents (79%) are from Selangor and Kuala Lumpur. The most

affordable house in the Sime Darby-UM study is in Melawati and the household

income required to own a property in Melawati is MYR9,360. This means that even

the most affordable property is already beyond the reach of the majority in Kuala

Lumpur, Putrajaya and even Selangor. The property listed in Nilai requires a

household income of MYR9,430 which is almost twice the mean household income

of Negri Sembilan and even exceeds the mean household income of Kuala Lumpur.

Hence, it can be concluded that some properties in the selected areas are beyond

the reach of the majority in Kuala Lumpur, Putrajaya and Selangor.

0% 20% 40% 60% 80% 100%

Selangor

Kuala Lumpur

Penang

Johor

Perak

Sabah

Sarawak

Putrajaya

Kedah

Malacca

Negeri Sembilan

Kelantan

Perlis

Pahang

Terengganu

Labuan

48%

31%

6%

5%

2%

2%

2%

1%

1%

1%

1%

Currently Residing in

18

Slightly more than half the respondents (53%) are interested in buying property,

while 21% are first-time homebuyers. That amounts to a whopping 74% who are

looking at property purchase either for own stay or investment.

Almost half (drop from 56% from previous survey to 49%) of respondents have

stayed in their current premises for 5 years or less, while almost a quarter (23%)

have been in the same abode for 6 to 10 years.

0% 20% 40% 60% 80% 100%

Interested in Buying Property

First Time Home Buyer

Just Monitoring the market

Real Estate Professional / Property Agent

Interested in Selling Property

Interested in leasing and renting property

Looking to Rent our a Property

Expatriate

53%

21%

11%

5%

3%

3%

3%

1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0 - 5 years 6 - 10 years 11 - 20 years More than 20

years

All my life

49%

23%

15%

9%

3%

Consider Themselves

Years in Current Premises

19

95% of respondents currently own residential property, and they are mainly living in

terrace houses (48%) or condominiums/apartments (28%). This might mean that

married respondents would prefer to live in houses with their families.

Residential properties are the most transacted type of properties in the Klang Valley,

making up 75% in the last three years, and condominiums received the highest

demand from homebuyers. This trend is similar in Selangor.

0% 20% 40% 60% 80% 100%

Residential Property

Shop/Commercial Buildings

Car Park

Land

95%

10%

9%

9%

0% 10% 20% 30% 40% 50%

Terrace House

Private Condominium / Serviced…

Flat/Walk-up Apartment

Semi-detached House

Bungalow

Shop Office

SOHO

Retail Space

Hotel / resort

Factory / industrial property

48%

28%

10%

8%

5%

1%

0%

0%

0%

0%

Properties Owned

Currently Residing In

20

As always, online is the preferred source of information for respondents. A distant

second is newspapers / magazines, while real estate agents and professionals are

third in the list.

0% 20% 40% 60% 80% 100%

iProperty.com

Newspapers / magazines

Other Web Portals

Talk to Real Estate Professional /

Property Agent

Refer to Family members and friends

Attend porperty seminars /

exhibitions

Television / radio

93%

53%

49%

32%

29%

21%

6%

Source of Information

21

A large percentage (57%) are interested in purchasing new properties, while 34% are

on the fence. The top three sources of information for new properties are:

1. Online property websites and search engines

2. Directly from developers

3. Property exhibitions

According to an industry body, Malaysian Internet Exchange (MyIX), Malaysia’s

Internet usage rose 51% in 2013. Internet traffic consumption today showed the

biggest annual percentage increase ever in more than a decade. Plus, in early 2014,

On Device Research published a report on Mobile Malaysia: ahead of the pack,

which showed that 47% of Malaysians own more than 1 mobile phone. These

figures, plus respondents’ sentiment, confirm a known fact – digital media is here to

stay (and is growing rapidly!).

0% 20% 40% 60% 80% 100%

Yes

Maybe

More Interested in resale property

No

57%

34%

5%

4%

Interest in New Property

22

Apart from detailed information about the property, which is still the most

important information property purchasers require, the type of information

respondents seek has changed quite a bit.

This survey Last survey

1 Detailed information about

the property

Detailed information about the

property

2 Property price comparisons

High quality photos

3 Reviews on property/location Property price comparisons

4 High quality photos

Neighbourhood information

5 Price growth comparison Compare features

6 Compare features

Read reviews

7 Display of average asking

prices

Interactive maps

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Currency convertor

Video presentation on the property

Research mortgage financing

Home buyer assistance

Update/Summary on Government Regulations

Agent contact information

A home-buyers checklist

Home mortgage calculator

Interactive maps

Display of average asking prices

Neighbourhood information

Compare features

Price Growth comparison

Hi-quality photos

Reviews on the property/location

Property price comparisons

Detailed information about the property

6%

18%

19%

20%

23%

26%

26%

32%

32%

40%

40%

41%

48%

54%

66%

73%

85%

Information Required

23

The main percentages remain relatively unchanged from the previous survey. A

quarter of respondents (25%) are looking into property purchase in the next 6

months.

There does not seem to be an increased urgency despite the uncertainty of whether

buyers will have to bear any rise in costs for new houses from the implementation of

the Goods and Services Tax (GST) on 1st April 2015.

CIMB Research said the impact of the measures introduced during the government’s

Budget 2014, is going to be negative in the short-term, but should be positive over

the longer-term as it will help remove froth from some segments in the market.

Some measures introduced in Budget 2014 include Real Property Gains Tax (RPGT)

to 30% for gains on properties disposed of within the holding period of up to three

years. For disposals within the holding period of up to four and five years, the rates

are decreased to 20% and 15% respectively. The government also introduced a new

minimum price for property that can be purchased by foreigners, from MYR500,000

to MYR1 million.

0% 20% 40% 60% 80% 100%

Within the next 6 months

6 - 12 months from now

1 - 2 years from now

At least 2 years or more from now

Not interested at the moment

25%

30%

26%

13%

6%

When to Purchase

24

Most respondents still feel that property prices are too high (up from 57% in the

previous survey to 67%), while the other two co-related reasons are trouble finding

properties that they can afford, and insufficient funds for a down payment.

Affordability seems to be a constant and growing concern. Plus, with the lack of

wage increase and assistance for the middle-income group, these might be the

reasons that a higher percentage of respondents compared to the last survey, are

motivated to purchase property as a long-term investment and for rental income.

The desire to accumulate asset surpassed respondents desire to own a home of their

own (which was the main motivation in the last survey).

H2 2014 H1 2014

1 For long-term investment

Desire to own a home on my own

2 Desire to own a home on my

own

For long-term investment

3 For rental income

For rental income

4 Desire for a home in a better

area

Desire for a larger home

5 Desire for a larger home

Affordability of homes

0% 20% 40% 60% 80% 100%

Property prices are too high

Not having enough money for a down

payment

Cannot find a property that is affordable

Waiting to see what measures will be

announced in Budget 2015

Unpredictable proeprty market

Banks making it too hard to qualify for a

home mortgage

Concerned that that the value of the

property will decline after buying it

Lack of good financing options

Having too much debt from from college

and student loans

67%

36%

36%

24%

21%

18%

17%

16%

6%

Reasons for Not Purchasing

25

The top five considerations when purchasing property remain unchanged from the

previous round – Location, Price, Size, Security and Facilities.

0% 20% 40% 60% 80% 100%

For long-term investment –…


For rental income

Desire for a home in a better area


Affordability of Homes

For short- term investment – capital gain

Change in family situation

Retirement

Desire to be closer to job/school/transit

Purchase home for family member or relative

Job-related relocation or move

Desire to be closer to family/friends/relatives

Desire for a smaller home

45%

44%

40%

27%

26%

25%

24%

13%

12%

11%

10%

8%

6%

6%

2%

0.00 2.00 4.00 6.00 8.00 10.00 12.00

Location

Price

Security

Size

Potential capital Appreciation

Potential rental yield

Facilities

Developer’s track record and …

Status of property…

Financing eligibility/process

Eligibility for housing…

Recommendations

10.24

10.17

7.90

7.55

6.63

6.56

6.15

5.88

5.65

4.83

3.54

2.89

Motivation to purchase

Factors of Consideration

26

As the main motivation is for long-term investment, respondents might have

preferred high-rise buildings as they fetch better rental yield and provide additional

income, and can achieve a substantial amount of capital appreciation as well

(although this would likely be less than a landed property).

During the second half of 2013, rents of existing high-end condominiums in Kuala

Lumpur city have remained stable, ranging from MYR3 to MYR5.50 per square foot

(psf) per month, according to Knight Frank’s report. Next to KL City, Bangsar’s high-

end condominiums have rents ranging from MYR2.50 to MYR4.50 psf, followed by

Damansara Heights with rents between MYR2.50 and MYR4.00 psf.

According to Global Property Guide’s website, Malaysia has a small rental market.

Only 6% of the housing stock is in the private rental sector. About 85% of total stock

is owner-occupied, while government-provided housing accounts for 7% of the

stock.

This round, there is greater interest in homes under PR1MA, Malaysia My First Home

scheme, and Malaysia My Second Home scheme. On a separate note, the National

Housing Council was set up in 2014 to develop strategies and action plans in a

holistic manner, coordinate legal aspects and property price mechanism, and ensure

provision of homes in a more efficient and expeditious manner.

0% 10% 20% 30% 40% 50% 60% 70% 80%

Private condominiums/serviced…

Terraced House

Semi-detached house

Homes under PR1MA…

Detached House

Homes under Malaysia My First…

Flat/walk-up apartment

Bungalow

Office / Retail

Homes under Malaysia My Second…

Student Housing

Government Housing

Retirement Homes

Industrial

Hotels

Not considering

70%

69%

40%

25%

19%

19%

18%

16%

15%

12%

10%

9%

6%

4%

3%

1%

Types of property interested in

27

Consistent with previous survey’s result, the top three preferred locations to

purchase property is Klang Valley, Selangor, and Putrajaya. Penang and Johor is at a

distant fourth and fifth position respectively.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Selangor

Kuala Lumpur

Putrajaya

Penang

Johor

Perak

Negeri Sembilan

Malacca

Sabah

Sarawak

Kedah

Pahang

Kelantan

Terengganu

Perlis

82%

78%

25%

22%

15%

8%

8%

7%

3%

3%

2%

2%

1%

1%

0%

Preferred Location

28

There is a big dip (from 68% in the previous survey to 54%) for those with a budget

of less than half a million Ringgit. On the other hand, these respondents have

increased their budget to the MYR500,001 to MYR800,000 range.

This sentiment is in tandem with the rise in average prices in properties. By property

type, nationally, during the year to Q3 2013:

• The average price of terraced houses rose by 7.8% y-o-y to MYR238,337

• The average price of detached houses increased 15.1% y-o-y to MYR458,858

• The average price of semi-detached houses rose by 14.7% to MYR421,622

• The high-rise price index soared 13.7%, to an average price of MYR248,567

0% 10% 20% 30% 40% 50% 60%

Below MYR500,000

MYR500,001 - MYR800,000

MYR800,001 - MYR1 million

MYR1 Million - MYR 3 million

Above MYR3 million

53%

33%

8%

5%

1%

Budget to Purchase

29

OVERSEAS PROPERTY: SEEN AS A

GOOD INVESTMENT, AND

AUSTRALIA IS STILL THE PREFERRED

INVESTMENT LOCATION

There is a drop (from 51% to 45%) of those who are not considering overseas

properties, while there is a slight increase of those who are interested (from 21% to

23%).

0% 20% 40% 60% 80% 100%

No

Undecided

Yes

45%

33%

23%

Interest in Overseas Property

30

94% of respondents do not own properties overseas. The remaining 6% purchased

properties In Singapore (43%), Australia (28%), and United Kingdom (16%).

0% 20% 40% 60% 80% 100%

Yes

No

6%

94%

0% 20% 40% 60% 80% 100%

Singapore

Australia

The United Kingdom

The United States

New Zealand

China

Hong Kong

Philippines

Thailand

Indonesia

India

Vietnam

43%

28%

16%

13%

10%

8%

8%

5%

5%

5%

3%

2%

Currently Own Property Overseas

Country Property Is Located In

31

The properties were mainly purchased via developer (45%) and local agent (42%)

from country of origin.

The top three preferred overseas property location has remained consistent

throughout four surveys – Australia, Singapore, and the United Kingdom. These

investment locations are chosen probably because Malaysians are familiar with

them, perhaps having studied or worked there. According to HSBC, Australia appeals

to Malaysian investors for its proximity, quality education and lifestyle.

0% 10% 20% 30% 40% 50%

Purchased via developer

show/seminar/exhibition in your

country of origin

Used a local agent from country of

origin to purchase

Contacted agent online from the

country where the property is located

45%

42%

13%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Australia

Singapore

United Kingdom

New Zealand

Thailand

United States

Indonesia

China

Vietnam

Japan

Hong Kong

Philippines

India

Macau

39%

20%

12%

9%

5%

3%

3%

3%

2%

2%

2%

1%

1%

0%

How They Purchased

Where they want to Purchase

32

‘Private Condominium / Serviced Apartment’ (67%) is still the favourite type of

property to purchase overseas.

The main budget for overseas properties are ‘Below MYR500,000’ and ‘MYR500,001

to MYR800,000’.

0% 10% 20% 30% 40% 50% 60% 70%

Terrace house


Semi-detached house

Bungalow

SOHO

Retail space

Shop Office

Hotel / Resort

Factory / Industrial Property

67%

31%

26%

16%

14%

14%

6%

6%

4%

2%

0% 5% 10% 15% 20% 25% 30% 35%

Below MYR500,000

MYR500,001 - MYR800,000

MYR800,001 - MYR1 million

MYR1 million - MYR3 million

MYR3 million and above

32%

31%

22%

13%

2%

Type of Property They Want to Purchase

Budget

33

40% of respondents are only looking into overseas property investment two years

from now, while 35% do not have any plans of purchasing.

The main reason for entertaining the idea of overseas property investment is the

same as local properties – good investment. Migration is the second reason that

respondents find overseas properties attractive.

0% 10% 20% 30% 40%


6 to 12 months from now

1 to 2 years from now

No plan


3%

7%

15%

35%

40%

0% 5% 10% 15% 20% 25% 30% 35% 40%

It is a good investment

Expect to migrate or retire to that

country in the future

For vacation / residential purpose

For my children to study aboard

The potential yield is high

Favourable exchange rate

The economic slowdown in that country

has brought prices down

The country has housing policies that

encourage foreign ownership

39%

19%

12%

10%

9%

5%

4%

2%

When to purchase

Why They Want to Purchase

34

Consistent with answers for information search for local properties, respondents

look to online sources, followed by newspapers / magazines.

0% 10% 20% 30% 40% 50% 60% 70%

iProperty.com

Other web portals

Newspapers / Magazines

Attend exhibitions that feature

overseas property projects

Talk to real estate professional /

property agents

Refer to family members and friends

61%

54%

34%

31%

25%

23%

Where They Source for Information

35

SENTIMENTS: DESPITE MEASURES

OUTLINED IN BUDGET 2014,

PROPERTY PRICES ARE STILL SEEN

AS NOT AFFORDABLE. MOST

BELIEVE THAT THE 6% GST WILL

LEND TO AN INCREASE IN

PROPERTY PRICES. Affordability and rising house prices are still the biggest concerns, followed by

stringent home financing policies and high interest rates, and poor building quality.

0% 20% 40% 60% 80% 100%

Affordability and rising house prices

Poor building quality

Stringent home financing and high

interest rates

Errant developers

Economic and political uncertainties

83%

53%

46%

36%

31%

Current Views on the Property Market

36

Additionally, on a scale of 1 (very affordable) to 10 (not affordable at all), the

respondents chose an average of 7.29, slightly lower than the previous survey which

was at 7.5.

The affordability index has been trending down since 2009 after the hikes in the BLR

(to 6.6%, from 5.6% over 2009-2011) and higher property prices (+12.5% CAGR vs

income growth of +6% between 2010 and 2013). This would impact investment

decisions for new purchases and could eventually lead to a decline in property sales.

Maybank IB Research also pointed out that household debt had reached a high of

86.8% of nominal GDP at the end of 2013, and could possibly climb to 88% by the

end of this year. It also said that it remained neutral on the property sector, and

that key risks included further tightening measures and interest rate hikes.

On 10th July 2014, Bank Negara Malaysia (BNM) raised the overnight policy rate

(OPR) by 25 basis points to 3.25%, the first time since May 2011 with economists

expecting the rate hike to address the potential rise in financial imbalances. BNM

said going forward, the overall growth momentum was expected to be sustained

while inflation has been relatively stable.

CIMB Research said loan growth may slow down in an environment with a higher

interest rate but the impact would not be big as the magnitude of the rate hike is

expected to be small (less than one percentage point) at 25bps to 50bps in 2014 to

2015.

0 2 4 6 8 10

Current Property Prices7.29

Current Views on the Property Market

37

Respondents are loyal to their favourite investment hotspots in and out of Selangor.

The three main areas that respondents think will be the next investment hotspots in

Selangor are Petaling Jaya, Ara Damansara, and Puchong.

Outside Selangor, the top three areas remain the same as the last survey, with a new

state appearing in the third spot to tie with Melaka:

1. Iskandar Malaysia, Johor

2. Georgetown, Penang

3. Melaka, Melaka & Nilai, Negeri Sembilan

5% 15% 25% 35% 45%

Petaling Jaya

Ara Damansara

Puchong

Kajang

Cyberjaya

Bukit Jalil

Shah Alam

Sungai Buloh

Seri Kembangan

Bangsar

Putrajaya

Rawang

Klang

Gombak

Rawang

41%32%

29%26%

24%24%

23%22%

18%18%

16%12%

10%6%

0%

0% 20% 40% 60% 80% 100%

Iskandar Malaysia, Johor

Georgetown, Penang

Melaka

Nilai, Negeri Sembilan

Nusajaya, Johor

Seremban, Negeri Sembilan

Johor Bahru, Johor

Ipoh, Perak

Kota Kinabalu, Sabah

Kuantan, Pahang

Kuching, Sarawak

60%

58%

29%

29%

29%

28%

24%

21%

11%

5%

5%

Hot Spots in Selangor

Hot Spots Outside Selangor

38

47% of respondents opined that transactions will remain more or less the same,

while slightly more compared to the previous survey, from 35% to 37%, provided

positive sentiment.

It will remain more or less the

same

Yes, Definitely

Not Sure

0% 10% 20% 30% 40% 50%

47%

37%

16%

Will property Transactions Pick Up in the Next 6 Months?

39

Most respondents are not interested as they deem that properties in Iskandar

Malaysia are either too expensive (27%), or they are just not looking for properties in

Johor Bahru (37%). This might be due to the lack of knowledge of properties in Johor

Bahru and respondents might also be more comfortable purchasing properties in

Kuala Lumpur or Petaling Jaya.

Iskandar Malaysia has always been the influencing factor in Johor property. Iskandar

Malaysia has five flagship zones, two of which are now inundated with upcoming

property developments and catalytic government plans to develop the regional

socio-economic hub.

Iskandar Malaysia property projects have been largely marketed to attract

Singaporeans, hence many Malaysians might be less familiar with the masterplans

for each zones.

Kuwait Finance House Research (KFHR) said for the first-half of 2014, cooling

measures will dampen speculation but Iskandar is a long-term play, with the

foundation and infrastructure for Phase 1 (2006-2010) already laid down and with

raised cumulative committed investments reaching MYR131.6 billion. The report also

said that the whole of the Iskandar project is expected to be completed in 2025, and

by then it is set to prosper and live up to its vision to be a preferred location to

invest, live, work and play.

0% 5% 10% 15% 20% 25% 30% 35%

Yes, I think Iskandar is a safe and good

investment

Yes, but I will wait for a few years

before I purchase

No, the properties are too expensive

No, I am not looking for properties

anywhere in Johor Bahru

20%

20%

27%

33%

Interest in Purchasing Property In Iskandar Malaysia

40

74% of respondents feel foreign property buyers have led to the escalation of

property prices.

Under Budget 2014, Prime Minister Datuk Seri Najib Tun Razak doubled the

minimum property price for foreigners from MYR500,000 to MYR1 million.

Specifically, the MYR1 million price threshold took effect on 1 March 2014 for all

federal administered territories – Labuan, Putrajaya and Kuala Lumpur. Johor

followed in May and the Johor government also eyed an additional two percent tariff

for overseas buyers across all property segments. Penang is the only Malaysian state,

where foreigners are subject to a MYR1 million minimum price on the mainland and

MYR2 million if it is a landed property on the island. Penang is also considering a

three percent levy on foreign property buyers, according to its Chief Minister Lim

Guan Eng.

According to CBRE Malaysia, in spite of the curbs, Malaysian properties are still

cheaper than those in Singapore. A 1,000 sq ft condo in the city-state sells for

USD800,000 (MYR2.61 million) to USD960,000 (MYR3.14 million), while a similar-

sized flat in Kuala Lumpur goes for about USD374,000 (MYR1.22 million).

According to real estate consultancy Knight Frank, luxury residences in Malaysia sell

for between USD2,300 and USD5,600 per square meter, much lower than

USD27,600 to USD33,700 in Singapore and USD43,700 to USD53,500 in Hong Kong,

Average rental yields are also more attractive in Malaysia at 4% to 6%, compared to

3% in Singapore and 2.5% in Hong Kong.

Mortgage terms are also better for non-residents in Malaysia, with buyers able to

borrow 70%of a property's value. That's more generous than the 40% to 60% in

Singapore, and 30% to 50%in Hong Kong.

0% 20% 40% 60% 80% 100%

Yes

Uncertain

No

74%

14%

11%

Are Foreign Buyers Driving up Property Prices

41

43% of respondents surveyed feel that the measures are ‘Average’, while 20% feel

that they are ‘Fair’.

As for Budget 2014’s impact on the industry, majority are split between ‘Too early to

tell’ (33%) and ‘No’ (36%).

0% 20% 40% 60% 80% 100%

Average

Fair

Bad

Good

Undecided

Excellent

43%

20%

18%

11%

8%

2%

0% 10% 20% 30% 40% 50%

No

Too early to tell

Unsure

Yes

35%

33%

21%

11%

Views on Budget 2014

Effectiveness of Budget 2014 on the Property Market

42

Analyst from RHB Research believes that Malaysia’s property sector will recover in

the second half of 2014 driven by a stronger 2014 gross domestic product (GDP)

growth outlook and the implementation of the goods and services tax (GST) in April

2015. However, with the fresh hike in interest rates due to the OPR increase by Bank

Negara Malaysia, there might be a slight hinge in recovery.

The implementation of the GST from 1 April 2015 is expected to spur demand for

big-ticket items, such as white goods and properties, as consumers rush to make

purchases to avoid paying the tax.

Having said that, 41% of respondents replied that GST will not stop them from

investing. This coincides with the fact that there is no increase in respondents who

are looking to purchase property in the next year.

0% 10% 20% 30% 40% 50%

No

Yes

I Don't Know

41%

34%

25%

Will GST Stop Them from Investing

43

Almost half (45%) of respondents feel that loan applicants should be offered loans

on a case-by-case basis. This might be due to the respondents’ psychographics as

53% of respondents are interested in purchasing property, and might also be

stemmed from the affordability factor where they might fear denial of loans.

26% of respondents surveyed think that the penalty is fitting. However, 40% of

respondents feel that a bigger penalty should be implemented.

0% 10% 20% 30% 40% 50%

Yes, but they should offer loans on a

case-by-case basis

Yes, people should not be able to

purchase something they can’t afford

No, people should be able to purchase

any property they desire

45%

38%

17%

0% 20% 40%

Yes, but it should be a bigger penalty

No, it is too small a penalty

Yes, it is fitting

No, it is too severe

40%

28%

26%

6%

Is Bank Negara’s Loan-to-value ratio on net income as opposed to gross income

fair?

Changes to National Housing Development to fine developers RM 500,000

and jail time for up to three years for abandoned projects fair?

44

The top five schemes that respondents would like delivered in Budget 2015 are:

1. Better control on house prices

2. Better public transportation

3. More low cost & affordable housing in strategic locations

4. Reduction in income taxes

5. Reduce interest rates on housing loans

0% 20% 40% 60% 80% 100%

Better control on house prices

Better public transportation

More low cost & affordable housing…

Reduction in income taxes

Reduce interest rates on housing…

Reduce import duty taxes on cars

Free education across all levels

Stricter regulations on foreign…

Abolish Tolls

Lower the Real Property Gains Tax

Remove the Stamp Duty

Better healthcare

Continue to provide subsidies on…

Improve road conditions

Impose stricter enforcements…

Increase the Sin Tax on Tobacco…

62%

40%

39%

27%

25%

16%

14%

12%

13%

11%

10%

9%

8%

7%

4%

3%

Schemes for Budget 2015 to Deliver

45

The three more important considerations for PR1MA affordable homes are still the

same as the last survey:

• Location

• Public Transport

• Amenities

The 1Malaysia People’s Housing (PR1MA) project has received 500,000 applications

since registration was opened last year. In March 2014, Minister in the Prime

Minister’s Department Datuk Seri Shahidan Kassim said the online applications were

for 80,000 houses. The 80,000 houses approved under this first phase are in the

analysis and planning stages. He also said that the government would also have a

meeting with PR1MA Malaysia Corporation to discuss the second phase involving an

additional 80,000 houses for this year. These units form part of the 500,000 to be

rolled out by the company by 2018. Property consultants have said that Perbadanan

PR1MA Malaysia should develop them in or near city centres where the demand is.

To date, PRIMA homes are in Nusantara Prima, Johor Baru and Alam Damai, Cheras.

As at August last year, out of the 20,519 units that were approved by Perbadanan

PR1MA’s board of directors, 31.7% are in city centres, including 4,636 units in Kuala

Lumpur and 1,877 units in Kuching, Sarawak.

In May 2014, MRT Corp Chief Executive Officer Datuk Azhar Abdul Hamid said that

the progress on the highly anticipated MRT project is slightly ahead of schedule, with

more than half of its tunnelling works completed.

With the two key considerations in the early stages of development, time will tell if

measures taken will address the issue of affordability.

0 1 2 3 4 5

Location

Public Transport

Amenities

Gated &guarded property

Highway Adjacent

4.44

4.24

4.01

3.45

3.24

Factors With Regards to PR1MA

46

More than half (55%) of respondents think that Goods and Services Tax (GST) will

affect their purchase decision, as they (85%) believe that it will increase property

prices.

With the imposition of GST next year, the cost of local residential properties is

estimated to increase by 3 to 4%. Whether the increased cost will be transferred to

house buyers depends on demand for the property concerned. For highly-demanded

residential properties, the increased cost is expected to be borne by house buyers.

For those in the less demanded areas, extra cost due to GST would likely be

absorbed by the developers.

Goods and services will be categorised under three groups – ‘standard rated’ where

6% GST will be imposed; zero rated and exempt rated.

0% 20% 40% 60% 80% 100%

Yes

No

Unsure

55%

26%

19%

0% 20% 40% 60% 80% 100%

Property prices will increase

Property prices will only increase in

prime and high-density areas

Property prices will not be affected

85%

10%

3%

Will GST affect Their Decision to Purchase Property

How will GST affect the Property Market

47

INDONESIA: BUYERS ARE IN STILL

IN WAIT-AND-SEE MODE AFTER

THE ELECTION

Prospective buyers are in a wait-and-see mode, hence there is reduced demand in

the second quarter, the lowest in the past five years. Market is expected to pick up

again later this year as the elections are over.

The real estate sector has shown growth since last year, with property shares on the

Indonesian Stock Exchange rising by more than 70% in the first five months of this

year. Occupier demand has been propelled by strong economic growth, growing

middle class, purchasing power, and an attractive market for business and foreign

investment.

The World Bank predicts solid future growth for Indonesia's economy, although

there is much work to be done in improving infrastructure within Jakarta to ensure

further expansion in the property market.

A joint study by the Washington-based Urban Land Institute (ULI) and the Jakarta

branch of PricewaterhouseCoopers, Emerging Trends in Real Estate: Asia Pacific

2013, found that Jakarta ranked first as the most preferred destination for real

estate investment in the region.

PriceWaterHouseCoopers (PWC) and Urban Land Institute USA have placed

Indonesia as one of the big three Asian countries with the highest potential for

property investment. Jakarta and Bali are the two cities in the country that offer

great prospects.

Barriers for housing mortgage

Prospective buyers are in a wait-and-see mode, hence there is reduced demand in

the second quarter, the lowest in the past five years. Market is expected to pick up

again later this year as the elections are over. Jakarta Governor Joko Widodo,

popularly known as Jokowi, will lead Indonesia as its new president as he faces the

challenge of uniting the country’s population of 250 million.

70% of Indonesia’s total workforce are informal sectors, under non-payroll and most

of them are associated with poverty. Hence, they are deemed as non-creditworthy.

The vast majority of low-income housing are self-help housing, with incremental

housing based on financial ability.

48

http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/Session2_NugrohoTriUtomo.pdf

Indonesia was ranked 53rd in a survey of distribution efficiency of countries by the

World Bank. By comparison, Thailand ranked 35th and Malaysia 25th. President Joko

Widodo has pledged to accelerate administrative and budgetary efforts to expand

and upgrade facilities like roads, ports and airports. Whether Indonesia will be able

to build up necessary infrastructure fast enough depends on the new

administration’s commitment to budgetary and policy reforms.

However, even as the government tightens control on property sales, there is also a

long-standing housing shortage. The report cited a developer as saying that the big

cities would need about 13 million new housing units, including 200,000 in Jakarta.

Real estate firm Knight Frank said that Jakarta topped the list of its index of price

growth in the world’s luxury real estate markets. Prices in the city have increased by

38% last year. Average property prices in Jakarta currently stand at USD346 per

square foot, up from USD250 in the previous year.

A senior BI (Bank Indonesia) official has said that housing demand is approximately

13 to 15 million units, while yearly supply was 1 to 1.5 million.

49


INDIVIDUALS WITH SLIGHTLY

MORE BUDGET LOOK FORWARD

TO OWNING THEIR OWN HOUSE,

PREFERABLY IN JAKARTA

The breakdown of gender and marital status is the same as Malaysia – majority are

males (from 64% in the previous survey) to 69%. The number of male respondents

has increased steadily since the past two surveys.

0% 20% 40% 60% 80% 100%

Male

Female

69%

31%

Gender

50

Similar to the previous survey, most respondents (43%) fall into the 31 - 40 age

bracket.

The National Population and Family Planning Board (BKKBN) estimate the nation’s

young age population will likely peak between 2025 and 2035, when the productive

age population outnumbers the elderly and children. Around 60% of Indonesia’s

population of about 250 million population is in the working age of 15 to 64 years

old. Such a youthful population is attracting companies abroad to tap into

Indonesia’s potential labor pool.

By comparison, in developed countries such as Japan, birth rates are not keeping up

with an aging population that would ensure strong economic growth for the future.

0% 10% 20% 30% 40% 50%

Below 20

20 - 30

31 - 40

41 - 50

Above 50

1%

31%

43%

20%

5%

Age Group

51

Majority of respondents (72%) are married and almost all respondents (99%) are

citizens of Indonesia.

0% 20% 40% 60% 80%

Other

Single

Married

2%

26%

72%

0% 20% 40% 60% 80% 100%

Indonesian Citizen

Non Citizen Residing in Indonesia

Not living in Indonesia

99%

0.5%

0.5%

Marital Status

Residency Status

52

The percentages are similar to the previous survey. The respondents are mainly from

Capital City District of Jakarta (37%), while 20% of respondents are from West Java,

and 12% of respondents are from East Java.

Most of the respondents are Clerks/Administrators (up from 36% in the last survey

to 39%), while 17% are entrepreneurs. Those who are Executives/Managers

comprised 12% of respondents.

0% 20% 40% 60% 80% 100%

DKI Jakarta

Jawa Barat

Jawa Timur

Banten

Jawa Tengah

Bali

Sulawesi Selatan

Sumatera Utara

Yogyakarta

Aceh

Kalimantan Barat

Kalimantan Selatan

Kalimantan Timur

Kepulauan Riau

Nusa Tenggara Barat

Sumatera Selatan

37%19%

12%9%

7%3%2%2%2%1%1%1%1%1%1%1%

0% 20% 40% 60% 80% 100%

Clerical / Administrative

Self Employed

Executive / Managerial

Civil Servant

Professional / Technical

Sales

Homemaker

Student


Retired

Unemployed

40%

17%

12%

9%

8%

5%

4%

3%

1%

1%

0%

Where They Are From

Profession

53

A large percentage (60%) fall into the ‘Below IDR100 million’ annual household

income, and 21% belong to the ‘IDR101 million and IDR200 million’ group.

According to government data, of 114 million workers in Indonesia last year, 86.5%

were unskilled, while only 8% were trained and 3.8% skilled, and the remaining

lightly skilled.

If Indonesia does not upgrade its human resources and provide skilled workers as

well as adequate job opportunities, many of its youth will face unemployment.

There is an increase of respondents who are first-time homebuyers (from 33% to

37%), and more than a third (33%) are on the sidelines watching the market.

0% 10% 20% 30% 40% 50% 60%

Less than IDR100 million

IDR100 million – IDR200 million





Lebih dari IDR601 million

Prefer not to say

60%

20%

5%

2%

1%

1%

1%

9%

0% 10% 20% 30% 40%

First Time Home Buyer

Just Monitoring the market

Interested in leasing and renting property

Interested in Selling Property

Interested in Buying Property

Real Estate Professional / Property Agent

Looking to Rent our a Property

37%

33%

8%

7%

6%

6%

4%


Consider Themselves

54

44% of respondents do not own any property, which corroborates with the fact that

there are more first-time homeowners in this survey. There is also a slight drop

(from 40% to 36%) of those who own a property.

Those who own a property are living in houses (88%).

0% 10% 20% 30% 40% 50%

None

1

2

3

4

More than 4

44%

36%

11%

4%

1%

3%

0% 10% 20% 30% 40% 50% 60%

Parents/Family Home

Rental Property

Rented Apartment

Boarding / Home Office

56%

38%

3%

2%

No of Properties owned

Currently Living in

55

More than half (52%) of respondents have been living at their current place for 5

years or less, while 61% of respondents have 4 or more people living under the same

roof.

0% 10% 20% 30% 40% 50% 60%

0 - 5 years

6 - 10 years

11 - 20 years

More than 20 years

All my life

52%

21%

14%

10%

3%

0% 5% 10% 15% 20% 25% 30% 35%

1

2

3

4

More than 4 people

6%

12%

21%

27%

34%

No of people in a household

Years lived in current premises

56

Respondents who do not own any property are either currently living with their

parents or in their family home (56%), which co-relates to the larger number of

people living under one household. 38% of respondents surveyed are renters.

These demographics are similar to the previous survey.

The top four sources of information for property are:

1. Online search engines

2. Property exhibitions

3. Magazines

4. References from family and friends

0% 10% 20% 30% 40% 50% 60%

Parents Home / Family Owned

Contract / lease homes

Renting an Apartment

Boarding / Home Office

56%

38%

3%

2%

0% 20% 40% 60% 80% 100%

Rumah123.com

Other websites

Property Exhibitions

Family and Friends


Real Estate Agents / Professionals

Television / Radio

87%

54%

40%

38%

37%

13%

9%

Sources of Information

Owns No property, Living in

57

52% of respondents are interested in new developments, while 37% are ambivalent

about it. They would seek information online, at property exhibitions, newspapers

and directly from developers. It is interesting to note that they would reach

developers directly only after scouring three other sources of information.

0% 10% 20% 30% 40% 50% 60%

Yes

Maybe

No

More interested in second hand

property

52%

37%

5%

5%

0% 10% 20% 30% 40% 50% 60% 70%

Online – Search Engines


Print Ads

Directly from developers


TV / Radio

SMS Ads

66%

53%

35%

34%

31%

14%

3%

Interest in New Developments

Source of Information on New Developments

58

68%

47%

34%

25%

23%

18%

16%

16%

13%

11%

10%

10%

7%

4%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80%






Desire for vacation…


Retirement

Desire to be closes to…

For rental income

Purchase home for family member…

Desire to be closer to…

For short- term investment – capital …



34% are looking to purchase property in the next year, while 29% would purchase at

least two years from now.

The top three motivations for purchasing property are:

1. Want to own their own house

2. For long-term investment / increase assets

3. Want to own a house in a better area

0% 5% 10% 15% 20% 25% 30%






12%

14%

20%

25%

29%

When to Purchase

Motivation to Purchase

59

The top two reasons across three countries (Malaysia, Singapore and Indonesia) are

the same for these two questions.

Most respondents either do not have enough to place a down payment, or property

prices are too high.

Location, Price and Size are the three factors that respondents look into when

considering to purchase a property.

0% 10% 20% 30% 40% 50% 60%

Not having enough money for a down payment

Property price is too high

Can’t find a property that I can afford

Banks making it too hard to qualify for a home

mortgage


Waiting to see what measures will be announced

in Budget 2015

Unpredictable property market

Having too much debt from college and student

loans

Concerned that the value of the home will decline

after buying it

55%

45%

44%

25%

11%

9%

7%

5%

4%

0.0 2.0 4.0 6.0 8.0 10.0 12.0

Location

Price

Size

Security

Facilities

Status of property (freehold/leasehold)


Potential capital Appreciation

Developer’s track record and reputation

Financing eligibility/process

Eligibility for housing schemes/programs

Recommendations

10.8

10.7

8.7

8.5

7.3

6.1

5.7

5.2

5.0

4.0

3.8

2.1



60

The three types of preferred properties are as below.

52% of respondents would consider Jakarta, while 34% would pick Bogor. The

growth in the economy, the buying power of the middle class, increase in traffic

issues and rise in fuel prices, have been major drivers for people to be located closer

to the areas of the workplace and within the more central Jakarta areas

In the Indonesian capital of Jakarta, not even the notorious traffic congestion can

slow the voracious demand for property. Roughly 10 million people live within the

urban core of this vast city while a further 28 million populate the suburbs.

With affluent cash-buyers and local businesses driving the housing market at a rapid

pace, anyone with a hope of climbing on the property ladder has to move fast to

secure value.

0% 20% 40% 60% 80% 100%

Houses

Kiosk/Shop

Private condominiums/serviced apartments

Land

Student Housing

Villa


Warehouse

Office / Retail

Hotels

91%

25%

24%

24%

18%

9%

4%

3%

2%

2%

0% 10% 20% 30% 40% 50% 60%

Jakarta

Bogor

Tengerang

Bekasi

Depok

52%

33%

24%

20%

19%

Properties Interested In

Where They Want to Purchase

61

The top five information that respondents seek to help in the decision-making

process are:

1. Detailed information, including facilities

2. Price comparison

3. Quality photos

4. Facilities in area

5. Analysis of KPR (Kredit Pemilikan Rumah)

0% 10% 20% 30% 40% 50% 60% 70% 80%

Detailed information about the property /facilities

Property Price Comparisons

Hi-quality Photos

Amenities near property

Mortgage analysis

Mortgage Calculator


Display of Average Asking Prices

Interactive maps

Compare Features




A Home-buyers check-list

Property videos

Currency Conversion

80%

64%

56%

42%

39%

37%

35%

29%

24%

23%

22%

22%

20%

12%

11%

5%

Information They Want to See

62

In this survey, respondents have increased their budget. There are more

respondents with a budget between IDR201 million and IDR300 million (from 22% to

25%), and those with a budget between IDR300 million and IDR500 million (from

18% to 22%). Those with budget surpassing IDR3 billion also increased from 1% to

2%.

0% 5% 10% 15% 20% 25% 30% 35%

Less than IDR200 million

IDR200 million- IDR300 juta

IDR300 million- IDR500 juta

IDR500 million- IDR1 billion

IDR1 billion - IDR2 billion


Above IDR 3 billion

31%

25%

22%

13%

5%

1%

2%

Budget

63

OVERSEAS PROPERTY: GENERALLY

UNINTERESTED, ALTHOUGH

AUSTRALIA IS GAINING

POPULARITY Majority of respondents do not own overseas properties.

0% 20% 40% 60% 80% 100%

Yes

No

3%

97%

Currently Own Property Overseas

64

Those who own properties overseas purchased them in:

1. Singapore

2. Australia

3. Malaysia and the United States.

The property transactions were mainly made at property exhibitions in Indonesia.

0% 10% 20% 30% 40% 50% 60%

Singapore

Australia

Malaysia

USA

The UK

New Zealand

Thailand

China

Hong Kong

Phillipines

Vietnam

58%

29%

20%

20%

16%

9%

7%

7%

7%

4%

4%

0% 10% 20% 30% 40% 50% 60% 70%


show/seminar/exhibition in your

country of origin

Used a local agent from country of

origin to purchase

Contacted agent online from the

country where the property is located

62%

36%

30%

Where They Purchased

How They Completed The Purchase

65

60% of respondents are not looking to purchase properties overseas. For those who

are considering overseas property, they would only be interested at least 2 years

from now.

0% 10% 20% 30% 40% 50% 60%

No

Unsure

Yes

60%

30%

10%

0% 20% 40% 60% 80% 100%





3%

2%

8%

87%

When They Want to Purchase

Considering to Purchase Property Overseas

66

There is a slight drop in preference for Singapore, while the interest in Australia has

seen a steady increase.

Countries H2 2014 H1 2014 H2 2013 H1 2013

Singapore 60% 69% 58% 56%

Australia 38% 37% 26% 23%

Malaysia 24% 24% 17% 15%

0% 10% 20% 30% 40% 50% 60%

Singapore

Australia

Malaysia

UK

Japan

USA

Hong Kong

New Zealand

Thailand

China

Macau

Vietnam

Phillipines

India

60%

37%

24%

15%

14%

12%

9%

9%

6%

6%

3%

3%

2%

1%

Preferred Overseas Location

67

Respondents’ budget for overseas property is similar to the last survey, with more

opting for budget between IDR1 billion and IDR3 billion.

38% would spend less than IDR1 billion, while those who would spend above IDR3

billion are 27% (up from 33%). 34% (up from 28%) would spend between IDR 1

billion and IDR 3 billion.

0% 10% 20% 30% 40%

Less than IDR 1 billion




Above IDR10 billion

38%

34%

14%

8%

5%

Budget to Purchase

68

The preference for local and overseas properties is rather different. Most would

prefer to purchase residential buildings overseas.

Local Overseas

1 House Apartment

2 Commercial House

3 Land Condominium

0% 10% 20% 30% 40% 50% 60%

Apartment

Houses

Private condominium / serviced…

Villa

Flat / walk-up apartment

Retail space

Land

Boarding Home

Hotel

SOHO

Warehouse

53%

48%

17%

15%

13%

11%

9%

6%

5%

4%

2%

Type of Properties Interested In

69

The top reasons overseas property are attractive to respondents are:

1. Good investment

2. For holiday / stay

3. Potential capital appreciation

With the growing needs for children’s overseas education, holiday homes, a better

retirement life and diversified wealth opportunities among the affluent, overseas

property investments are becoming an integral part of their lifestyle and wealth

portfolios.

0% 10% 20% 30% 40% 50% 60% 70%


For vacation/residential purpose

The potential yield if high


I expect to migrate or retire to that

country in the future

The country has housing policies that

encourage foreign ownership

The exchange rate works in my favour

The economic slowdown in that country

has brought prices down

61%

42%

40%

22%

16%

16%

11%

6%

Why the Location is attractive

70

The main source of property information is consistent with local property

information search. Websites / online search engine is favoured, while exhibitions

are preferred over references from friends and family.

Newspapers and magazines dropped out of the top three sources; it was second

preferred channel in the previous survey.

0% 10% 20% 30% 40% 50% 60% 70%

iProperty.com

Other web portals (Google, Yahoo,

etc)

Attend exhibitions that feature

overseas property projects


Newspapers/magazines

Talk to real estate professionals /

property agents

65%

60%

28%

24%

20%

16%

Sources of Information For Overseas Property

71

SENTIMENTS: AFFORDABILITY

CONCERNS ARE PREVALENT, WHILE

A LARGE PERCENTAGE ARE

UNAWARE OF SOME FINANCING

SOLUTIONS AND HOUSING

POLICIES Most respondents (37%) are concerned about affordability and rising property

prices. Another key concern is financial policies for homes and interest rates.

0% 10% 20% 30% 40%

Affordability and rising property

prices


interest rates

Errant developers and poor building

quality


37%

30%

19%

14%

Main Concerns On Property Market

72

Affordability is again reflected. On a scale of 1 (very affordable) to 10 (very

unaffordable), the average rating sits at 6.9, slightly higher than 6.68 in the previous

survey.

An Al Jazeera report in May highlighted that a small two-room apartment far from

the city centre in Jakarta can cost up to US$80,000 (S$101,100) — increasingly out of

reach of regular Indonesians.

0 1 2 3 4 5 6 7

Affordability

6.9

View on Current Affordability Levels

73

More than half (55%) of respondents disagree with the revocation of Housing

Financing Liquidity Facility (FLPP). Reportedly, starting April 2015, the government

will impose revocation of FLPP for residential homes.

0% 10% 20% 30% 40% 50% 60%

Disagree

Agree

Unsure

55%

23%

22%

Views on the Revocation of Housing Financing Liquidity Facility

74

However, another 55% agree that Bank Indonesia should maintain its LTV policy,

despite 57% saying it plays a role in their property purchase decision.

The growth of banking house mortgages (KPR) in Central Java slowed down due to

the implementation of loan to value (LTV) policy. After the implementation of LTV,

the banking house mortgages for large-house is at 0.38% (quarter-to-quarter), lower

than the growth of house mortgage in the previous period of 1.55%. The middle-

segment house mortgage growth of 0.73% (quarter-to-quarter), is lower than the

growth of 2.89% in the previous period.

0% 10% 20% 30% 40% 50% 60%

Yes

Unsure

No

55%

26%

19%

0% 10% 20% 30% 40% 50% 60%

Yes

Unsure

No

57%

25%

18%

Should Bank Indonesia Maintain its LTV policy

Has the LTV policy played a role in your property purchase?

75

60% of respondents surveyed opine that the elections will affect the property

market, while 75% think that the property market will benefit in a positive way after

the election.

According to Jones Lang LaSalle Indonesia, once the new president is elected,

Indonesia can have clearer business projection. Residential property remains a

“popular investment vehicle for cash-rich Indonesians.

A senior associate director for research and advisory of Cushman & Wakefield

Indonesia said that prospective buyers are in a wait-and-see mode, reducing demand

in the second quarter to the lowest in the past five years. But the market is expected

to pick up again later this year after the elections.

0% 10% 20% 30% 40% 50% 60%

Yes

No

60%

40%

0% 20% 40% 60% 80%

Yes

No

75%

25%

Will the property market experience an upward trend after the 2014

presidential elections

Will the property market benefit in a positive way after the elections

76

69% of respondents are accepting of super-block mega-projects in grade 2 cities in

Indonesia.

In a recent study by Moody’s Investors Service, the agency stated that buyers are

holding off acquisitions until the results of the elections are determined. Combined

with higher mortgages, loan restrictions and Indonesia’s slowing economy, revenue

growth in the property sector is expected to slow to 11% in 2014, from 29% in 2013;

as a result of a high base of comparison last year and slower-than-expected

marketing sales.

Global property services firm Jones Lang LaSalle Indonesia forecasted a softer

market demand in the luxury apartment segment, although the 2014-15 outlook is

still upbeat due to limited luxury supply. The condominium segment, however, is

expected to weaken in the coming months as a reaction to increased interest rate of

7.5% recently imposed by the Indonesian central bank.

0% 10% 20% 30% 40% 50% 60% 70%

Yes

No

69%

31%

Positive about the presence of super-block mega-projects that are now

beginning to explore grade 2 cities in Indonesia

77

However, despite this acceptance, they (87%) are also worried about surging

property prices that might take place.

60% are not aware of the government’s Public Housing Saving programme

(Tabungan Perumahan Rakyat/Tapera).

0% 20% 40% 60% 80% 100%

Yes

No

87%

13%

0% 10% 20% 30% 40% 50% 60%

Yes

No

40%

60%

Aware of the Government’s Public Housing Saving Programme

Concerned About Surging Property Prices if flooded with new mega-city

developments

78

Regardless, 57% do not mind cutting their income by 3% each month for Tapera.

Majority of respondents feel that the increase in Sale Value of Tax Object (SVTO) will

affect the value of their property.

The government’s policy to increase the SVTO of land and buildings at 140% is

expected to lead to decreased turnover for homes and property sales.

0% 10% 20% 30% 40% 50% 60%

Yes

No

Unsure

57%

30%

13%

0% 10% 20% 30% 40% 50% 60% 70%

Agree

Disagree

Unsure

68%

21%

11%

Agreeable to Income being cut by 3%each month for Public Housing Savings

Will the Sale Value of Tax Object have an impact on the value of your

property

79

According to respondents, the three main actions that will give developers a bad

reputation are:

• Developers do not build as per promotion and promises after the sale and

purchase transactions

• Developers that do not take care of the legality of the correspondence land and

buildings

• Developers that do not build public facilities and social facilities

KPR (Kredit Pemilikan Rumah) is seen as the most beneficial, followed by staggered

cash payments.

A number of banks have stated their commitment to provide financing facility

through mortgage loan (KPR) which can reach the society’s need in overcoming

housing backlog.

0 1 2 3 4 5 6

Developers do not build according to the

agreement that promoted or promised after…

Reneges developers to build public facilities

and social facilities.

Developers are not taking care of

correspondence legality of land and buildings.

The developer does not provide clear

information on a regular basis on the status…

Developers do not actively communicate when

there are obstacles or problems in…

Developers are very difficult to reach even tend

to avoid if you want to ask questions or ask…

3.9

3.1

2.2

1.95

1.1

1

0% 10% 20% 30% 40% 50% 60%

KPR

Gradual Cash

Hard Cash

53%

34%

13%

Which of the following will give developers a bad reputation?

Most beneficial schemes for those buying a property

80

59% don’t know about financing solutions for KPR developers’ products, but they

(78%) think that is sufficient to utilise developers’ KPR as a mortgage solution.

0% 10% 20% 30% 40% 50% 60%

No

Yes

59%

41%

0% 20% 40% 60% 80%

Safe

Unsafe

78%

22%

Aware about financing solutions for KPR developers

Is the move sufficient to utilize developer’s KPR

81

The preferred sources of funds are:

1. Own savings

2. Bank loans

3. Combination of own savings and bank loan

0% 20% 40% 60%

Personal savings

Borrow from banks (mortgage / KTA)

The combination of personal savings and

borrowing from banks

Family/Couple Savings

The combination of personal savings and

funds from parents

Funds from parents

Borrow from parents/ relatives

Borrow funds from the cooperative, or

other non-bank institutions

58%

41%

37%

29%

9%

8%

8%

7%

Funds to purchase property

82

53% of respondents feel that the current home interest rates are high, while 14%

deem it as very high. The current Indonesian interest rate BI (base rate) is 7.5%.

According to a survey released by BI in May, creditors for home mortgage loans

(Kredit Pemilikan Rumah / KPR) for houses or type70 loans have reached 25.9% , an

increase of 60.3% over the three months since May. Meanwhile, creditors of

mortgage loans for apartments (Kredit Pemilikan Apartmen / “KPA”) or type 22 to 70

loans reached 18.7% and increased by 111.1% over the same period.

BI Deputy Governor said that the significant growth in property loans will result in it

being difficult for middle and lower income people to access KPR loans. The high

level of property loans will trigger a hike in the price for smaller types of houses that

are intended for middle- to lower-income earners.

0% 10% 20% 30% 40% 50% 60%

Very Low

Low Enough

Average

High

Very High

1%

2%

30%

53%

14%

Views on the current home interest rates

83

Most respondents (72%) are unaware of AREBI (Real Estate Brokers Association of

Indonesia).

0% 20% 40% 60% 80%

Yes

No

28%

72%

Aware of on an organization called AREBI

84

HONG KONG: GOVERNMENT’S

PROPERTY CONTROL MEASURES

BECOME ONE THE CHIEF FACTORS

AFFECTING THE DESIRE TO BUY

AND SELL According to a report by CNBC, despite a slew of measures aimed at damping down

Hong Kong's runaway home prices, some segments of the market are heating up

again, potentially spurring further tightening measures.

Since 2008, property prices in Hong Kong have surged nearly 120 percent due the

ultra-low interest rate environment, tight supply and abundant liquidity. Residential

property prices in Hong Kong are still rising after four years of continuous house

price rises, but at a slower pace, amidst government efforts to cool down the

housing market.

According to the Ratings and Valuation Department (RVD), house prices rose by 9.7%

year on year to end-October 2013 (5.19% inflation-adjusted), a sharp slowdown

from the 22.11% year-on-year increase in October 2012 (17.64% inflation-adjusted),

As such, it’s no surprise that Hong Kong consistently ranks among the world's most

expensive property markets.

The Hong Kong government imposed three measures between 2012 and 2013 in

response to soaring property prices caused by an influx of cash into the city’s

property market. These measures include the expansion of stamp duties on those

who resell their property quickly, a 15 percent levy on both corporate buyers and

non-permanent residents of the city and double stamp duty on all properties costing

more than HK$2 million, except for those bought by permanent residents who are

either first-time buyers or sell their only home to buy another.

85

In the past three years alone, the government has introduced a number of cooling

measures:

Year Measures Introduced Reasons

November

2010

- Special Stamp Duty (SSD) was

implemented

- To curb excessive

property speculation

and short-term

trading activities in

the residential sector

-

October

2012

- A 5% - point increase in the SSD rate

and an extension of the restriction

period from two to three years.

- To curb investment

and buying activities

attributed to non-

local buyers.

- Introduced a Buyers’ Stamp Duty (BSD)

for the first time ever, which imposed

an extra 15% charge on top of the

existing stamp duty for residential

properties bought by corporate and

non-local buyers.

- Raised special transaction taxes to as

much as 20% on properties sold within

three years of purchase.

February

2013

- Doubled the stamp duty on all property

transactions worth more than HK$2

million (US$257,902).

- Intended to curb local

Investment demand,

not just for

residential but also

non-residential

properties.

- Stamp duty is now charged on an

agreement of sale and purchase of non-

residential properties, including

commercial premises, offices, industrial

premises and parking spaces.

- Measure aims to

increase the cost of

the transaction if a

buyer makes a sub-

sale before the date

when the property is

delivered.

- Imposed a 15% extra tax on foreign

homebuyers and raised the minimum

down payment requirements for some

mortgages.

86

Hong Kong's home prices have more than doubled since 2008, driven higher by a

flood of cheap money from developed markets' central banks in the wake of the

global financial crisis.

The special administrative region's property market has become the world's least

affordable, according to a Demographia International Housing Affordability Survey,

published in January. The survey found average home prices were 14.9 times gross

annual median household income, the highest level ever recorded in the survey's 10-

year history.

The number of new and existing homes sold in July jumped to 7,792, after remaining

below 6,000 a month for the past year, according to government data.

According to Colliers International, the increase in stamp duties and the impact of

SSD and BSD lead us to believe there is only very limited room for short-term

investors to play in the local residential market. The government is now actively

monitoring developments in the nonresidential property sectors as well.

Hypothetically, if it implements similar SSD and BSD in non-residential real estate

sectors, we would not rule out the possibility that real estate players, including some

long-term investors, will leave Hong Kong to seek real estate opportunities with

better risk-adjusted returns in other markets.

87

DEMOGRAPHICS: STILL CAUTIOUS

DUE TO OVERPRICED PROPERTY

PRICES

In comparison with H1 of 2014, there was an increase in female (57% to 60%)

respondents, while there was a slight decrease in the number of male respondents

(43% to 40%).

60% of respondents were married.

0% 10% 20% 30% 40% 50% 60%

Male

Female

40%

60%

0% 10% 20% 30% 40% 50% 60%

Married

Single

Others

60%

37%

3%

Gender

Marital Status

88

Majority of respondents were between the ages of 30 – 39 years old, an increase

compared to findings in the first half of 2014 (40% to 46%)

The results also show that there is quite an even distribution between those with 2

and 3 people in their household. 33% of respondents have more than four members

in their household.

0% 5% 10% 15% 20% 25%

19 or below

20-24

25-29

30-34

35-39

40-44

45-49

50 or above

1%

3%

14%

23%

23%

16%

10%

10%

0% 5% 10% 15% 20% 25% 30%

1

2

3

4

More than 4

9%

29%

29%

23%

10%


Age Group

89

There was an increase the number of respondents reporting that they held white-

collar jobs (28% to 31%). Professionals continue to remain the second largest

occupation group represented.

58% of respondents reported a monthly personal income between HKD$15,000 –

HKD$40,000 while 15% reported an income of between HKD$40,001 – HKD$60,000.

Only 5% had an annual income of HKD$80,000 and above.

0% 5% 10% 15% 20% 25% 30% 35%

White-collar

Professional

Executive／Managerial

Salesperson

Self-employed

Technician

Homemaker

Retired

CEO／Senior Executive

Unemployment

Other

Student

31%

22%

15%

7%

7%

6%

6%

4%

1%

1%

1%

1%

0% 5% 10% 15% 20% 25% 30%

Below HKD 15,000

HKD 15,000 - HKD 25,000

HKD 25,001 - HKD 40,000

HKD 40,001 - HKD 60,000

HKD 60,001 - HKD 80,000

HKD 80,000 above

18%

30%

28%

15%

4%

5%

Occupation

Monthly Personal Income

90

There was a slight decrease in the number of respondents who considered

themselves first time home buyers (23% to 22%) and property buyer (19% to 18%)

compared to findings in H1. Respondents who considered themselves tenants, real

estate professionals and expatriates remained unchanged. In this survey finding,

34% of respondents considered themselves property owners, a slight increase from

H1 (33%).

0% 5% 10% 15% 20% 25% 30% 35%

Property Owner

Tenant

First Time Property Buyer

Property Buyer

Investor

Property Seller

Real Estate Professional

Expatriate

34%

33%

22%

18%

9%

5%

1%

1%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Rental

Self-owned

Self-owned (mortgaged)

Public Housing

Apartments under Home Ownership Scheme

(HOS)

42%

36%

23%

0%

0%

Consider Themselves

Currently Staying In

91

Respondent’s main source of property information continues to be from online –

search engines.

The top three information that respondents want to see when searching for

property related information and news is detailed property information, property

prices comparison and property photos.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Online – Search Engines (Google, Yahoo, etc)


Direct Mailers from Developers/Agents

TV


Flyers/Brochures

Billboards


Radio

Other

81%

33%

31%

15%

12%

10%

8%

8%

3%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Detailed property information

Property prices comparison

Property photos

Property features comparison

Estate ratings

Property facilities information

Mortgage calculator

Mortgage analysis

Mortgage information

Property video

Agent’s contact

Interactive map

Others

73%

65%

62%

37%

36%

34%

32%

31%

28%

23%

16%

16%

0%

Source of Property Information

Information They Want to See

92

The survey findings continue to reveal that Hong Kong people trade up their

properties once every five years on average. There is a slight change in the number

of respondents who have stayed in their current premises for less than five years

(53%) compared to the previous findings (57%).

83% did not sell nor purchase property in the first half of the year.

0% 10% 20% 30% 40% 50% 60%

0 – 5 years

6 – 10 years

11 – 20 years

More Than 20 years

All my life

53%

18%

17%

10%

3%

0% 20% 40% 60% 80% 100%

None of the above

Sold

Sold and purchased

Purchased

83%

7%

6%

5%

Years Lived in Current Property

Did you sell or purchase any residential properties in first half of 2014？？？？

93

63% of respondents will consider shifting their capital to investment options, with

stocks, currency and securities being the top three investment choices.

0% 10% 20% 30% 40% 50% 60% 70%

Yes

No

63%

37%

0% 10% 20% 30% 40% 50% 60% 70%

Stocks

Currency

Securities

Car park

Retail/Commercial Building

No Interest

Grave/Niche

Other

66%

47%

25%

17%

12%

10%

4%

2%

Under the current uncertain property market environment, would you consider

shifting your capital to other investment options?

Other Investment Options

94

OVERSEAS PROPERTY: JAPAN

INCREASINGLY ATTRACTIVE;

MAINLAND CHINA AND SOUTH

EAST ASIA PROPERTIES REMAIN

POPULAR

88% of respondents currently do not own properties overseas or in China, while 12%

reported that they do.

0% 20% 40% 60% 80% 100%

No

Yes

88%

12%

Currently Own Property Overseas or in China

95

Interest in overseas property investment has decreased compared to H1. The survey

showed that 22% of respondents want to purchase overseas properties compared to

last survey (25%).

Like last year, the most sought-after property markets for investors are South East

Asia regions (including Singapore, Malaysia, Thailand and Indonesia, etc.), reaching

48%. Mainland China comes next, amounting to 35%.

It is worth noting that Japanese properties have become the new target of Hong

Kong investors. The percentage of respondents interested in them has soared to

30%, a 12 percentage point increase from the 18% in the last survey, showing that

more Hong Kong investors are searching for investment targets in Japan recently.

0% 10% 20% 30% 40% 50% 60% 70% 80%

No

Yes

78%

22%

0% 5% 10% 15% 20% 25% 30% 35% 40%

China

Australia

Japan

U.K.

Singapore

U.S.

Malaysia

Macau

Thailand

Other

Indonesia

35%

32%

30%

30%

19%

17%

16%

12%

10%

6%

3%

Considering to Invest in Property Overseas

Where They Want to Purchase

96

Properties in mainland China also have their supporters. 35% of respondents

believe that Chinese properties are worth the investment. The most popular

Chinese cities are Shanghai (37%), Shenzhen (35%), Zhuhai (32%), Beijing (21%) and

Guangzhou (19%).

50% of respondents had a budget of HKD 1 to HKD 3 million.

0% 5% 10% 15% 20% 25% 30% 35% 40%

Shanghai

Shenzhen

Zhuhai

Beijing

Guangzhou

Zhongshan

Foshan

Dongguan

Other

37%

35%

32%

21%

19%

19%

10%

8%

6%

0% 10% 20% 30% 40% 50%

Below HKD 1 million

HKD 1 - HKD 3 million





Above HKD 50 million

19%

50%

22%

6%

2%

0%

1%

Budget to Purchase

Where In China they want to Purchase

97

32% plan on purchasing property overseas in 1 to 2 years from now, while 25% plan

to do so in at least 2 years or more.

44% of respondents indicate they would consider overseas real estate investment

due to the potential high investment return. Another 23% of respondents expressed

a desire to migrate to, or enjoy their retirement in an overseas market.

0% 5% 10% 15% 20% 25% 30% 35%





No plan

5%

15%

32%

25%

24%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

The potential yield is high

I expect to migrate or retire to that country in

the future

The exchange rate works in my favor

For vacation / residential purpose

For my children study aboard / in China cities

Other

44%

23%

11%

11%

10%

1%

Why they want to Purchase

When they want to Purchase

98

SENTIMENTS: FEELING PRESSURE

FROM THE GOVERNMENT’S

PROPERTY CONTROL MEASURES;

RESPONDENTS BEGIN TO SUPPORT

“EASING” AND “ELIMINATION” OF

CONTROL MEASURES Home purchase issues and property prices have been widely discussed and debated in the

community in recent years. The survey reveals that 84% of respondents consider properties

to be too high. The result is similar to the last survey half a year ago and the one last year,

showing that overpriced properties have long been the situation.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Prices are too high

Prices are reasonable

Prices are too low

84%

14%

3%

View on Current Property prices in Hong Kong

99

The public generally holds a more conservative view towards property prices. 46% of

respondents expect property prices to remain stable in 2H 2014. 33% of respondents,

however, believe property prices will go down. The higher income group, accounting for

37% of them, by and large expects a slowdown in the property market. There is a 4%

increase (to 21%) in the proportion of respondents which believes property prices will rise, a

revival after a drastic drop in the last survey (half year ago). An increasing number of

respondents hold a positive attitude towards the property prices. Yet 40% of respondents

predict the market will shrink by between 6% and 10%.

63% of respondents believe that the residential flat supply in the second half of 2014

is not adequate.

0% 10% 20% 30% 40% 50%

Property prices will decrease

Property prices will increase

Property prices will remain the same

46%

33%

21%

0% 10% 20% 30% 40% 50% 60% 70%

No

Yes

63%

37%

Believe the residential flat supply in the second half of 2014 is adequate?

Prediction for Hong Kong property prices in the second half of 2014?

100

Compared to previous years, Hong Kong people show that they hold a more

positive attitude towards property prices. Yet there is a decline in both the number

of respondents who would consider purchasing and selling property in 2H 2014.

28% of respondents would consider purchasing property in H2 2014, a drop of3%

points compared to the 31% in the last survey. Meanwhile, 14% of respondents

would consider selling property in H2 2014, a slight decrease of 1% point compared

to the last survey.

60% of respondents will adjust their property asking price when selling their

residential property. 67% of respondents shared that they will adjust the property

price by below 10%, while 21% will adjust the price from 11% to 20%.

0% 10% 20% 30% 40% 50%

No

No property

Yes

46%

39%

14%

0% 10% 20% 30% 40% 50% 60%

Yes

No

60%

40%

The Hong Kong SAR Government extended DSD change flat period recently.

Have these changes led you to consider selling your properties?

Will adjust property asking price when selling residential property?

101

The extension of the six-month waiver period has had a certain influence on

market transactions, with 23% and 24% of respondents expressing an intention to

sell or purchase properties respectively.

The latest government measure to relax the double stamp duty (DSD) affects

respondents’ decision to buy or sell a home, indicating that this new move has had a

certain effect on the market.

0% 10% 20% 30% 40% 50%

Make no change

Reduce the number or level of “special

measures”

Introduce additional “special measures”

Withdraw all “special measures”

45%

23%

22%

11%

0% 10% 20% 30% 40% 50% 60% 70%

Yes

No

36%

64%

The Hong Kong SAR Government extended DSD change flat period for the

second-home buyers recently. In the H2 of 2014, the government should:

The Hong Kong SAR Government extended DSD change flat period recently.

Have these changes led you to consider buying properties

102

In response to the series of control measures launched by the government,

developers are offering discounts and subsidies on recent new launches to boost

sales. 56% of respondents believe that there is a narrowing in the price gap

between new and second-hand properties. The discounts and promotions offered

by developers do help motivate respondents to consider purchasing first-hand

property.

Discounts and subsidies offered by developers (91%) have, for the first time,

become one of the top three factors to consider when purchasing new properties.

The other two factors include; geographical environment (97%) and location and

transportation (97%).

0% 10% 20% 30% 40% 50% 60%

Yes

No

56%

44%

0% 20% 40% 60% 80% 100%

Living environment

Location & transportation

Concessions provided by the developer

Price difference between new properties and…

New properties completion date and move in date

Developer & property management

Potential capital appreciation/ROI

Property appearance and architectural design


Clubhouse & facilities

Political and economic climate

97%

97%

91%

89%

86%

85%

82%

79%

73%

73%

70%

The price difference between new properties and 2nd hand properties are

narrowing, developers are offering a number of special offers and subsidies.

Have these special offers led you to consider buying new properties?


103

SINGAPORE: HOME PRICES ARE

EXPECTED TO CONTINUE TO BE

MODERATE AS MARKET SHOWS

SIGNS OF STABILISING

Singapore has become the most expensive city in the world to live in following rise in

house prices after an influx of foreign workers boosted the island's wealth and

demand for homes. According to a February Economist Intelligence Unit (EIU) report,

entitled The Worldwide Cost of Living Survey, a strengthening of the Singaporean

dollar and expansion of the republic's financial industry contributed to the country's

wealth.

According to the EIU statement, the survey is meant to let human resource line

managers and expatriate executives compare the cost of living in 140 cities in 93

countries, which would allow hiring companies to calculate a fair remuneration

package for relocating employees.

Some quarters have argued that the rank does not entirely reflect the true cost of

living of ordinary Singaporeans. Deputy Prime Minister and Minister for Finance,

Tharman Shanmugaratnam said that the survey is aimed at comparing cost of living

for expatriates in different cities or countries.

According to Global Property Guide, Singapore is at the 4th spot on the world’s most

expensive cities list. Figures are typically based on the average for a 120 square

metre apartment in most locations. The apartments are typically in a prime inner city

area, except in the Caribbean or Pacific.

Country Buying Price

US$ per

Sq.M

Price / Rent

Ratio (x)

Rent Per

Month ($)

Gross Rental

Yield

1 Monaco 53,026 53x 10,099 1.90%

2 UK, London 32,745 48x 6,856 2.09%

3 Hong Kong, Hong

Kong Island

20,660 33x 6,198 3.00%

4 Singapore 17,709 41x 4,276 2.41%

5 Russia, Moscow 16,509 26x 6,277 3.80%

http://www.globalpropertyguide.com/most-expensive-cities

104

Cooling measures

Singapore’s private home prices dropped by the most in almost 5 years following

efforts that began in 2009 to curb property market speculation, with government

curbs ranging from taxes on property sales, additional levies on foreign buyers and

mortgage limits.

According to preliminary data released on 1 July 2014 by the Urban Redevelopment

Authority (URA), an index tracking private-residential prices retreated 1.1% to 209.3

points in the three months to June, following an approximate 1.3% decline in the

previous three months.

Monetary Authority of Singapore (MAS), Singapore’s central bank, said that it is too

early to ease property restrictions after prices in Asia’s second-most expensive

housing market fell for three straight quarters. As it is still an initial stage of a price

correction, the government will probably look at the pace and period of correction

before deciding on relaxing measures. Home prices in Singapore will probably extend

declines as the government sticks with curbs.

Caution issued by the central bank

In May 2014, Singapore's central bank issued a warning to investors about the risks

posed by buying property overseas, as high house prices prompt a growing number

of Singaporeans to invest in real estate abroad.

MAS said the value of overseas properties dealt with by Singapore real estate

agencies was S$2 billion ($1.6 billion) in 2013, up from S$1.4 billion in 2012. A strong

Singapore dollar and curbs on mortgage lending at home have encouraged more

Singaporeans to buy property in United Kingdom and Australia. MAS reported a 43%

rise in the value of overseas property transactions handled by local real estate

agencies in 2013 compared with 2012.

Global Real Estate Transparency Index 2014

In a recently released Global Real Estate Transparency Index 2014, published by

consultancy firm Jones Lang LaSalle (JLL), Singapore kept its 13th place finish.

Hong Kong slipped to 14th place from 2012’s 11th place, making the Singapore the

most transparent real estate market in Asia. JLL explains Hong Kong’s downgrade to

lower scores caused by cooling measures initiated by the government as well as in

accounting standards and corporate government.

It is the second time that Singapore ranked higher than Hong Kong since JLL started

to publish the index in 1999. The 2014 study covers 102 markets globally.

105

Below are the JLL index’s top 20 most transparent real estate markets and their

respective scores.

1. United Kingdom – 1.25

2. United States – 1.34

3. Australia – 1.36

4. New Zealand – 1.44

5. France – 1.52

6. Canada – 1.52

7. The Netherlands – 1.67

8. Ireland – 1.62

9. Finland – 1.69

10. Switzerland – 1.73

11. Sweden – 1.79

12. Germany – 1.79

13. Singapore – 1.81

14. Hong Kong – 1.87

15. Belgium – 1.92

16. Denmark – 1.96

17. Poland – 2.02

18. Spain – 2.05

19. Norway – 2.07

20. South Africa – 2.09

106


HOMEOWNERS MONITOR MARKET

AS AFFORDABILITY CONCERNS

REMAIN

There is a significant drop in the number of male respondents from the previous

survey, 63% to 49%.

There are many more married respondents compared to the last survey, from 64%

to 71%.

48% 49% 49% 50% 50% 51% 51%

Male

Female

49%

51%

0% 20% 40% 60% 80%

Married

Single

Others

71%

27%

2%

Gender

Marital Status

107

Similar to the previous survey findings, respondents in the 31 – 40 age brackets

remain at 36% %), followed by the 41–50 age brackets (23%).

0% 10% 20% 30% 40%

Below 20

20 - 30 years old

31 - 40 years old

41 - 50 years old

51 and above

3%

19%

36%

23%

19%

Age Group

108

The top 5 districts (in descending order) that respondents currently reside in are:

• District 19 - Serangoon, Hougang, Punggol, Sengkang

• District 23 - Bukit Panjang, Choa Chu Kang, Bukit Batok, Dairy Farm, Hillview

• District 18 - Tampines, Pasir Ris, Simei

• District 20 - Ang Mo Kio, Bishan, Braddell, Mei Hwan, Thomson

• District 22 - Boon Lay, Lakeside, Jurong

There are more respondents from District 18 this time around, jumping from fifth

spot (previous survey) to the third spot.

0% 2% 4% 6% 8% 10% 12%

District 01

District 02

District 03

District 04

District 05

District 06

District 07

District 08

District 09

District 10

District 11

District 12

District 13

District 14

District 15

District 16

District 17

District 18

District 19

District 20

District 21

District 22

District 23

District 24

District 25

District 26

District 27

District 28

3%

6%

3%

4%

4%

5%

2%

7%

2%

3%

3%

6%

3%

4%

4%

5%

2%

7%

12%

6%

2%

5%

7%

0%

3%

1%

5%

1%

Currently Residing In

109

The percentages are relatively the same. Most respondents (30%) are

‘Executives/Managers’, while 19% are ‘Professionals’ and 11% are

‘Clerical/Administrative’.

There are less respondents earning less than SGD$60,000 per annum in this survey

(from 35% in the previous survey to 27%). 11% of respondents preferred no say what

their annual household income was.

0% 5% 10% 15% 20%

Professional/ Technical

Sales

Self Employed

Homemaker

ClericalAdministrative

Civil Servant


Retired

Student

Unemployed

Part - timer

19%

11%

10%

6%

6%

5%

4%

3%

2%

2%

2%

0% 5% 10% 15% 20% 25%

Below SGD$40,000

SGD$40,001 – SGD$60,000

SGD$60,001 – SGD$80,000

SGD$80,001 – SGD$100,000

SGD$100,001 – SGD$120,000

SGD$120,001 – SGD$140,000

SGD$140,001 – SGD$180,000

SGD$180,001 – SGD$240,000

Above SGD$240,001

Prefer not to Say

11%

16%

21%

16%

8%

5%

5%

4%

4%

11%

Profession


110

The results remain relatively unchanged from the last survey. 31% of respondents

have 4 people in their household, while 22% have more than 4 in their homes.

More than a third of respondents (30%) are adopting the wait-and-see approach by

monitoring the market, while 16% are first-time homebuyers. There is a much

smaller group of real estate professionals/agents in this survey (from 15% in

previous survey to 5%).

0% 5% 10% 15% 20% 25% 30% 35%

1

2

3

4

More than 4

4%

19%

24%

31%

22%

0% 5% 10% 15% 20%

First time home buyer

Interested in selling property

Interested in buying property

Looking to rent out a property

Interesting in leasing and renting

property

Real Estate Agent Professional/Agent

16%

16%

15%

12%

5%

5%


Consider Themselves

111

Most Singaporean respondents have been residing in their current abode for less

than five years (44%), while 24% have been living in the same place for 11–20 years,

and 23% have been in the same place for 6–10 years.

More than half of respondents (50%) own one property, while 21% do not currently

own a property.

0% 5% 10% 15% 20% 25% 30% 35%

0 - 5 years

6 - 10 years

11 - 20 years

More than 20 years

All my life

32%

24%

27%

12%

5%

0% 10% 20% 30% 40% 50%

None

1

2

3

4

More than 4

21%

50%

19%

5%

3%

2%

Years Lived in Current Premises

No of Properties Owned

112

Most respondents (80%) own a residential property, and combined with the fact that

50% of respondents own one property, it can be deduced that this group is made up

largely of property owners. In tandem with the previous three surveys, most

respondents (85%) live in residential buildings – HDB Flat (60%) and Private

Condominium (25%).

Overall, respondents profile seems to be largely consistent with the previous survey.

0% 20% 40% 60% 80%

Residential Property

Shop/Commercial Building

Land

Other

80%

16%

12%

2%

0% 10% 20% 30% 40% 50% 60%

HDB Flat

Private Condominium

Terrace House

Semi-detached house

Bungalow

SOHO

Office Space

Retail Space

Hotel/Resort

Factory /Industrial Property

51%

24%

9%

7%

5%

2%

1%

1%

0%

0%

Type of Properties Owned

Currently Living In

113

According to government data, 9 out of 10 Singaporean households own their own

home.

http://www.singstat.gov.sg/statistics/visualising_data/chart/Home_Ownership_R

ate_Of_Resident_Households.html

114

Online property sites are the preferred way of gathering property-related

information. Newspapers and magazines are second favourite, while real estate

professional/agent is third.

Almost half of respondents (38%) are in a contemplative mind-set when it comes to

newly developed properties.

0% 10% 20% 30% 40% 50% 60%

iProperty.com


Other web portals

Talk to real estate agent

Attend property seminars/exhibitions

Television / radio


Other

53%

48%

39%

39%

21%

17%

14%

4%

0% 10% 20% 30% 40%

Maybe

No

Yes

More interested in resale property

38%

30%

25%

6%

Source of Property Information and News

Looking to Purchase a Newly Developed Property

115

Respondents’ top three sources of information on new launches are:

• Developers

• Online

• Print ads

0% 10% 20% 30% 40% 50% 60%

Directly from developers

Online – Search Engines

Print Ads


TV / Radio


SMS Ads

Other

52%

52%

50%

38%

26%

23%

16%

2%

Source of Information on New Developments

116

The more details, the better it is. After all, property is a big-ticket item that requires

plenty of research and consideration prior to purchase. The main information that

respondents seek are:

1. Price comparisons

2. Detailed information (facilities)

3. Reviews on property/location

4. Price growth comparison and Display of average asking prices

0% 10% 20% 30% 40% 50% 60% 70%

Property Price Comparisons

Detailed information about the property /facilities



Display of Average Asking Prices

Hi-quality Photos

Compare Features


Amenities near property

A Home-buyers check-list

Mortgage analysis

Home mortgage calculator

Interactive maps

Property videos


Currency Conversion

Other

64%

58%

48%

44%

41%

39%

36%

32%

31%

29%

24%

23%

19%

17%

16%

10%

1%

Information Looked for Online

117

Majority of respondents are not looking to purchase property in the short-term.

Almost a quarter (24%) are looking to purchase within the year, while most of them

are probably waiting to see how the market performs in the next 2 years.

22% (up from 10% in the previous survey) are not interested to purchase at the

moment. The key reasons are due to affordability; property prices are deemed to be

too high, and they do not have enough to place a down payment.

0% 5% 10% 15% 20% 25% 30%






7%

16%

28%

27%

22%

0% 5% 10% 15% 20% 25% 30%

Property price is too high

Not having enough money for a down payment

Unpredictable property market

Other, please specify

Waiting to see what measures will be announced in

Budget 2015

Can’t find a property that I can afford

Banks making it too hard to qualify for a home

mortgage

Concerned that the value of the home will decline

after buying it


Having too much debt from college and student

loans

26%

21%

10%

9%

7%

7%

6%

6%

5%

3%

When to Purchase


118

There is a slight change in respondents’ motivation to purchase property. This group

of respondents seems interested in changing their profile from property owners to

property investors, as most respondents own one home at the moment. However,

as stated in one of the previous pages, they are not in a rush to purchase property.

This survey Last survey

1 For rental income A long-term investment

2 For long-term investment For rental income

3 Desire to own a home Desire to own a home

4 Desire for a larger home /



5 Desire to own a larger home

0% 5% 10% 15% 20% 25% 30% 35%

For rental income







Desire for vacation home/investment…

Retirement

For short- term investment – capital gain


Desire to be closes to job/school/transit

Desire to be closer to…

Purchase home for family member or…


Others - please specify

34%

29%

23%

20%

17%

16%

15%

15%

14%

11%

9%

9%

8%

7%

6%

1%

Main Motivation to Purchase

119

The three main types of property that respondents prefer are ‘Private

Condominiums/Serviced Apartments’, ‘HDB flats’, and ‘Terraced Houses’. It would

seem that many Singaporeans aspire to own a condo. Today, the price of an average

flat is between SGD$1 million to SGD$1.5 million, effectively pricing out many

middle-class and younger workers. According to the Global Property Guide,

Singapore is the 4th most expensive place in the world to buy an apartment, after

Monaco, London, and Hong Kong.

The districts that are more popular with respondents are:

• District 19 - Serangoon, Hougang, Punggol, Sengkang

• District 20 - Ang Mo Kio, Bishan, Braddell, Mei Hwan, Thomson

• District 03 - Alexandra, Queenstown, Tiong Bahru

• District 05 – Clementi, Dover, Pasir Panjang, West Coast

• District 11 - Novena, Newton, Thomson, Watten Estate, Meyer, Tanjong Rhu

Respondents seek properties that are not necessarily within the district that they live

in. Out of the top 5 in the list, only 2 districts are the same as where they live.

0% 10% 20% 30% 40% 50% 60%

Private condominiums/serviced apartments

Terraced House

HDB


Semi-detached house

Detached House

Bungalow

Office

Retail

Industrial

Retirement Homes

Not considering

Hotels

Student Housing


57%

25%

23%

21%

21%

16%

11%

7%

7%

6%

4%

4%

3%

3%

1%

Types of Properties Interested In

120

0% 5% 10% 15% 20%

District 01 - Cecil, Marina, People's…

District 02 - Anson Rd, Tanjong Pagar

District 03 - Alexandra, Queenstown,…

District 04 - Habourfront, Mount…

District 05 - Clementi, Dover, Pasir…

District 06 - Beach Rd, High Street

District 07 - Golden Mile, Middle Rd

District 08 - Little India

District 09 - Cairnhill, Orchard Rd,…

District 10 - Ardmore, Bukit Timah,…

District 11 - Novena, Newton,…

District 12 - Balestier, Serangoon,…

District 13 - Macpherson, Braddell

District 14 - Geylang, Eunos, Sims,…

District 15 - Amber Rd, Joo Chiat,…

District 16 - Bayshore, Bedok, Siglap,…

District 17 - Changi, Flora, Loyang

District 18 - Tampines, Pasir Ris, Simei

District 19 - Serangoon, Hougang,…

District 20 - Ang Mo Kio, Bishan,…

District 21 - Upper Bukit Timah, Ulu…

District 22 - Boon Lay, Lakeside,…

District 23 - Bukit Panjang, Choa Chu…

District 24 - Lim Chu Kang

District 25 - Kranji, Woodgrove,…

District 26 - Springleaf, Upper…

District 27 - Sembawang, Yishun

District 28 - Seletar, Yio Chu Kang

7%

9%

18%

14%

16%

8%

7%

5%

10%

13%

16%

14%

9%

12%

15%

14%

7%

12%

19%

19%

9%

12%

12%

3%

9%

7%

8%

5%

Where to Purchase

121

18% would spend less than SGD$500,000, while 12% would spend SGD$1 million to

SGD$1.5 million, and 18% would spend SGD$600,001 to SGD$700,000.

In early July, Deputy Prime Minister and Finance Minister Tharman

Shanmugaratnam, who is also chairman of the central bank, said that a further

correction in the Singapore property market would not be unexpected. Residential

prices have risen 40% since 30 September 2009 to their peak in September last year.

The managing director of the Monetary Authority of Singapore (MAS) said that debt

levels among highly-leveraged households remain high. The MAS has narrowed its

2014 inflation forecast to between 1.5% and 2%, from 1.5% to 2.5% as the property

curbs helped stabilise prices and rents.

0% 5% 10% 15% 20%

Less than $SGD500,000

SGD$500,001 to SGD$600,000

SGD$600,001 to SGD$700,000

SGD$700,001 to SGD$800,000

SGD$800,001 to SGD$900,000

SGD$900,001 to SGD$1 mil

SGD$1 mil to SGD$1.5 mil

SGD$1.5 mil to SGD$2 mil

More than SGD$2 mil

18%

13%

18%

13%

8%

9%

12%

5%

3%

Budget

122

53% of respondents surveyed are concerned about affordability and rising property

prices.

Singapore’s central bank said it’s too early to ease property restrictions after prices

in Asia’s second-most expensive housing market fell for three straight quarters.

Director of the Monetary Authority of Singapore (MAS) said that real estate prices

“remain at elevated levels” in its annual report released in July 2014. Singapore is

looking to secure the gains from stabilizing the market and restoring financial

prudence.

On an affordability scale, the rating average is 6.97 (1 being affordable and 10 being

unaffordable).

0% 10% 20% 30% 40% 50% 60%

Affordability and rising property

prices


interest rates


Errant developers and poor building

quality

Other

53%

25%

13%

8%

1%

0 2 4 6 8 10

Affordability

6.97

Concerns on the Property Market

Perception on Affordability

123

OVERSEAS PROPERTY: INCREASED

INTEREST IN THE UNITED

KINGDOM, WITH OVERALL

PREFERENCE FOR PRIVATE

CONDOMINIUMS / SERVICED

APARTMENTS

Most respondents (82%) do not own properties overseas. For those who own

properties overseas, their properties are largely in:

1. Malaysia

2. United Kingdom

3. Australia

The properties were mainly purchased via developers/seminars/exhibitions, and

local agents from the country they purchased in.

0% 20% 40% 60% 80% 100%

No

Yes

82%

18%

Own Property Overseas

124

0% 10% 20% 30% 40% 50%

Malaysia

United Kingdom

Phillipines

Australia

Thailand

United States

India

Other

Indonesia

New Zealand

China

Hong Kong

Vietnam

42%

10%

8%

8%

6%

4%

4%

4%

3%

3%

3%

3%

2%

0% 10% 20% 30% 40% 50% 60%


show/seminar/exhibition in your country

of origin

Used a local agent from country of origin

to purchase

Contacted agent online from the country

where the property is located

Other

53%

32%

8%

7%

Where They Purchased

How They Completed the Purchase

125

52% of respondents are not looking to invest in property overseas. While there is

lesser interest in Malaysia and a constant interest in Australia, Singaporeans

surveyed have also shown more interest in the United Kingdom.

Preferred

overseas

location

H2 2014 H1 2014 H2 2013 H1 2013

Malaysia 31% 35% 39% 42%

Australia 18% 22% 19% 15%

United

Kingdom

12% 9% 7% 7%

Thailand 7% 9% 9% 7%

In May 2014, the MAS said Singapore investors poured SGD$2 billion into foreign

properties last year – a 43% jump on year 2012. Malaysia accounted for slightly more

than half of real estate investments abroad last year by Singapore investors,

followed by the United Kingdom and Australia, based on the central bank’s

estimates.

MAS said the value of overseas properties dealt with by Singapore real estate

agencies was SGD$2 billion in 2013, up from SGD$1.4 billion in 2012. A recent

research report by estate agent Knight Frank found that buyers from Singapore

accounted for 23% of all purchases of newly built central London property in 2013,

second only to British buyers who accounted for 27%.

0% 10% 20% 30% 40% 50% 60%

No

Undecided

Yes

52%

34%

15%

Considering to Purchase Property Overseas

126

0% 5% 10% 15% 20% 25% 30% 35%

Malaysia

Australia

United Kingdom

Thailand

Indonesia

Phillippines

United States

New Zealand

Hong Kong

Other

Japan

Macau

Vietnam

China

India

31%18%

12%7%

4%4%4%4%

3%3%

2%2%2%2%2%

Preferred Overseas Location

127

Be it local or overseas property, respondents are not in a hurry to purchase. The

consideration period for overseas property is slightly longer, as 49% would only look

at buying overseas property 2 years from now.

43% of respondents would budget less than SGD$500,000 for overseas property.

0% 10% 20% 30% 40% 50%





9%

15%

27%

49%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Less than SGD$500,000

SGD$500,001 to SGD$600,000

SGD$600,001 to SGD$700,000

SGD$700,001 to SGD$800,000

SGD$800,001 to SGD$900,000

SGD$900,001 to SGD$1 mil

SGD$1 mil to SGD$1.5 mil

SGD$1.5 mil to SGD$2 mil

More than SGD$2 mil

40%

17%

9%

10%

7%

8%

7%

2%

1%

When to Purchase

Budget

128

Property investment is a real concern in Singapore, where the government has

stepped in with tough rules to restrict foreigners buying homes. The government has

tightened up stamp duty restrictions on companies buying residential property.

Many Singaporean investors look outside their home country for property because

the government charges a 7% stamp duty rate on second homes and requires them

to pay a 25% deposit.

In Britain, the government is proposing to scrap a capital gains tax exemption for

non-residents. Sellers will have to pay tax at a rate of between 18% and 28% on sales

of property.

Singaporean investors are being lured by a combination of new, prohibitive taxes on

second homes in the island state, record low interest rates, a strong currency and

promises of attractive returns from Australian developers.

As long as the prohibitive conditions on the purchase of second homes exists in

Singapore and the economic climate remains favourable, it is believed that

Singaporeans will continue to look to Australian property as an investment haven,

spurred on by generous rental guarantees from Australian developers.

129

By far, ‘Private condominium / serviced apartment’ is the preferred type of property

overseas. Coming in at a distant second and third are ‘Bungalow’ and ‘Semi-

detached house’ respectively.

Overseas Singapore

1 Private condominiums / Serviced

apartments

Private condominiums / Serviced

apartments

2 Bungalow HDB

3 Semi-detached house Terrace house

4 Terrace house Flat / Walk-up apartment

5 Flat / Walk-up apartment Semi-detached house

Respondents seek overseas property because it is perceived as a good investment,

for migratory purposes, and vacation/residential purposes.

0% 10% 20% 30% 40% 50%

Private condominium / serviced apartment

Bungalow

Semi-detached house

Terrace house


Shop office

SOHO

Retail space

Other

Hotel / resort

Factory / industrial property

41%

13%

12%

10%

6%

4%

4%

3%

3%

2%

0%

0% 5% 10% 15% 20% 25% 30% 35%


I expect to migrate or retire to that country in the future

For vacation/residential purpose

The potential yield if high

The exchange rate works in my favour

The economic slowdown in that country has brought prices down

The country has housing policies that encourage foreign ownership



33%

21%

13%

11%

9%

5%

3%

3%

2%

Properties Interested In

Reasons to Purchase

130

The popular search for information is always online. There is a slight difference for

overseas properties as respondents would prefer to attend exhibitions featuring

overseas properties, and talk to real estate professionals. Face-to-face

communication is seen as more important compared to newspapers when it comes

to overseas properties.

0% 5% 10% 15% 20%

Other web portals (Google, Yahoo, etc)

iProperty.com

Talk to real estate professionals /

property agents


Attend exhibitions that feature overseas

property projects


19%

18%

18%

16%

16%

14%

How They Search

131

In tandem with the decrease in interest in investing in Malaysia, 45% of respondents

(drop from 51% in the previous survey) are not considering Iskandar Malaysia, while

35% are undecided.

More than half (58%) of respondents would purchase a property at Iskandar

Malaysia for investment, while 22% would purchase for their own stay.

A five-bedroom, two-story home with private pool in Iskandar advertised was for

MYR3.9 million in May 2014. A similar-sized home on Singapore’s prime Sentosa

district with a waterfront view would be on sale for about 15 times as much.

0% 10% 20% 30% 40% 50%

No

Undecided

Yes

43%

39%

19%

0% 10% 20% 30% 40% 50% 60%

For investment

For own stay

For retirement

Other

56%

23%

20%

2%

Considering Investing in Iskandar Malaysia

Reasons for Buying in Iskandar Malaysia

132

37% of respondents pick Johor Bahru, while 30% preferred to invest in Nusajaya.

This sentiment remains unchanged from the last survey.

Respondents are attracted to Iskandar Malaysia due to its geographical proximity,

and affordable property prices.

Kuwait Finance House Research (KFHR) said that despite Malaysia’s property cooling

measures, Iskandar Malaysia is expected to continue as a preferred destination for

both domestic and foreign investment,

KFHR said that cooling measures will dampen speculation in the first-half of 2014 but

Iskandar is a long-term play, with the foundation and infrastructure for Phase I

(2006-2010) already laid down and with raised cumulative committed investments

reaching RM131.6 billion.

0% 10% 20% 30% 40%

Johor Bahru

Nusajaya

Medini

Other parts of Iskandar Malaysia

37%

30%

21%

12%

0% 10% 20% 30% 40% 50% 60% 70%

Close proximity to Singapore

Affordable property prices

Friendly foreign investment scheme

Other

69%

54%

17%

3%

Where They Want to Buy in Iskandar Malaysia

Why They Want to Buy

133

Be it local, overseas or Iskandar Malaysia, respondents are firm on their preference

type of property to purchase - Private condominiums / Serviced apartments. The

other two that they are interested in are Semi-detached house and terraced house.

The top three concerns about investing in Iskandar Malaysia are:

1. Crime and safety

2. Decline in property value after purchase

3. Lack of caveats and data

0% 5% 10% 15% 20% 25% 30% 35% 40%

Private condominium / serviced…

Semi-detached house

Terrace house

Bungalow

Detached house

Office


Retail space

Hotels

Industrial

38%

17%

13%

12%

7%

5%

3%

3%

0%

0%

0% 20% 40% 60% 80%

Crime & Safety

Concerned that the Value of the

property will decline after purchase

lack of caveats & data

Infrastructure

Property Prices is too high

Cooling Measures

No concerns

66%

52%

39%

38%

36%

25%

7%

Types of Properties Interested In

Concerns about Investing in Iskandar Malaysia

134

SENTIMENTS: AFFORDABILITY IS

STILL A KEY WORRY, EVEN AS

RESALE PRICES OF NON-LANDED

PRIVATE HOMES DROP More respondents (from 18% in the last survey to 21%) are unsure about whether

the average Singaporean family can afford resale HDB Flat prices, while 52% opined

that these flats are not within their reach.

According to Singapore Real Estate Exchange (SRX), resale prices of non-landed

private homes dipped 1.3 per cent month-on-month in July, with the private resale

price index hitting the lowest level since October 2012, based on a flash report

released yesterday by the Singapore Real Estate Exchange (SRX). From the recent

peak in January, prices have slipped 6.5 per cent.

Declines in prices were seen across all three regions, with the Core Central Region

(CCR), or city centre, leading the fall at 4 per cent last month.

Prices in the Rest of Central Region, or city fringes, dropped 1.1 per cent, while those

in the Outside Central Region, or suburbs, were down 0.6 per cent.

0% 10% 20% 30% 40% 50% 60%

No

Yes

I don't know

52%

27%

21%

Are The Current Resale HDB Flat prices affordable?

135

43% of respondents would like more ownership restrictions on foreigners, while 33%

would like the implementations of regulations on housing prices.

The government's cooling measures have brought the percentage of foreigners

buying up Singapore property on par with most other countries, as pointed out at

the inaugural OPPLive Asia conference at Marina Bay Sands in April 2014.

According to Global Property Guide, Singapore has experienced an influx of

expatriates in recent years. Some foreigners have preferred to buy, rather than face

escalating rentals, especially if they are going to be in Singapore for more than a

couple of years. Singapore now has the sixth-highest percentage of foreigners in the

world; about 38% of Singapore’s populations are foreigners. Of these, 10% are

permanent residents, and the remaining 28% expats.

Foreign buyers have contributed to Singapore’s strong recent house price increases.

While there was a decrease in the number of transactions across all buyer groups,

the proportion of purchases by non-Singaporeans increased q-o-q by 4.0 percentage-

points in Q1 to 29%. This was the highest proportion of private home purchases by

non-Singaporeans since the Additional Buyer’s Stamp Duty (ABSD) was first

introduced in December 2011.

0% 20% 40% 60%

Impose ownership restrictions on foreigners

who can invest or purchase Singapore

property

Implement regulations on housing prices for

property developers

Introduce other cooling measures similar to

TDSR to benefit first time buyers

Other

43%

31%

22%

4%

Measures the Government Can Implement to Ensure Affordable Prices

136

The sentiment is the same as the previous survey. 45% of respondents prefer the

government to manage the prices of HDB flats only.

Slightly more than half of respondents (53%) think that new and resale private

condominiums would see a price drop in the second half of 2014. In the last survey,

more respondents chose HDB resale flats as the property to see a price drop.

0% 10% 20% 30% 40% 50%

Yes

No

I don't Know

42%

41%

18%

0% 5% 10% 15% 20% 25% 30%

Landed Properties

High-end luxury properties (landed)

HDB resale flats

High-end luxury properties (non landed)

New private condominiums

Resale private condominiums

4%

8%

15%

18%

23%

30%

Should the Government be responsible for managing HDB prices?

Type of property that will see a price drop in H2 2014

137

38% feel that their property will retain its value in H2 2014, while 38% also feel

otherwise. Overall, the sentiment is mixed, with more being unsure of the market

when it comes to their opinion on a property’s value.

0% 5% 10% 15% 20% 25% 30% 35% 40%

Yes

No

I don't know

38%

38%

25%

Confident that their property will retain its value in H2 2014

138

The reduction of Mortgage Servicing Ratio (MSR) has affected 51% of respondents’

decision to purchase another property. This might be one of the reasons that

Singapore’s housing market continues to decline, despite a reasonable rate of

economic growth.

The private residential property price index dropped 1% during the year from Q1 to

Q2 2014, in contrast with the 4.1% annual rise seen year-on-year to Q2 2013. This

was based on figures released by the Urban Redevelopment Authority (URA). When

adjusted for inflation, house prices fell by 1.68% over the same period. On a

quarterly basis, private residential property prices fell 1.26% (-1.43% inflation-

adjusted) in Q1 2014.

20% 30% 40% 50% 60%

Yes

No

51%

49%

Has the reduction of the Mortgage Servicing Ratio (MSR) from 35% to 30% by

the government in August 2013 affected your decision to upgrade or purchase

another property?

139

Most respondents (65%) said that property remains unaffordable, despite lower

prices in certain regions.

On a scale of 1 to 6 (1 being most important and 6 being least important),

respondents are for lowered price per sq ft and early-bird discounts. They are least

interested in vouchers for furniture. Affordability is again the top worry for

respondents.

0% 20% 40% 60% 80%

Yes

No

35%

65%

0.00 1.00 2.00 3.00 4.00 5.00 6.00

Furniture vouchers

Direct Price Discounts

Partial absorption of stamp duty

Early-bird discounts

Option of smaller unit sizes

Lowered price per sq ft

1.78

3.05

3.43

3.75

4.04

4.95

According to reports by both URA and SRX, property prices in certain regions

have been lowered in H1 2014 compared to previous years. Thus, have

property prices become more affordable for you

With market exuberance for private homes tempered by the cooling measures and

TDSR framework, more developers are reviewing their marketing and pricing strategies

to entice buyers. Please rank the factors that you take into consideration for a new

property launch

140

Slightly more than half of respondents surveyed (56%) are satisfied with the

government’s efforts in cooling the property market.

Last year, MAS said that lenders must consider a borrower’s total debt when

granting mortgages. Under this loan framework, a borrower’s loan repayments,

including mortgages, shouldn’t exceed 60% of income, based on the policy

guidelines.

Declining home sales eased demand for housing loans. Mortgages increased just

7.9% in March 2014, the slowest pace since June 2007, according to central bank

data. Standard Chartered Plc’s Southeast Asia’s head said that Singapore’s home

prices will probably fall further before the housing curbs introduced in the past five

years are scaled back.

0% 10% 20% 30% 40% 50% 60%

Yes

No

56%

44%

Are you satisfied with the government’s plans announced in Budget 2014 to

keep property market cooling measures in place for the time being?

141

About the iProperty Group

Listed on the Australian Securities Exchange, the iProperty Group (ASX:IPP) owns and

operates Asia’s No.1 network of property websites under the iProperty.com

umbrella brand. Headquartered in Kuala Lumpur, Malaysia, the Company is focused

on developing and operating leading property portals with other complementary

offerings in Asian markets. It currently operates market leading property portals in

Malaysia, Hong Kong, Macau, Indonesia and Singapore, and has investments in India

and Philippines. With further expansion planned, the iProperty Group is continuously

working to capitalise on its market-leading positions and the rapidly growing online

property advertising market throughout the region. Along with 18 property websites

across the region, the Group’s portfolio also includes the first comprehensive

regional commercial property website, CommercialAsia.com, as well as a regional

property exhibition business and monthly property magazines in Malaysia and

Indonesia.

* Disclaimer

Although every precaution has been taken in the preparation of this report, the publisher and author assume no

responsibility for errors or omissions nor is liable for damages resulting from the use of the information contained

herein.

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