iProperty has recently concluded their Asia Property Market Sentiment Report released just recently. Being interested in all things property from home design, renovation to even the recent fluctuations in property prices globally, naturally i was curious to see what the report had to say.
We all should be aware that the iProperty Group is a company that operates an online property classifieds service for a number of countries which includes Malaysia, Singapore, Indonesia, Philippines and Hong Kong. Taking that into consideration, the results of this report, in my opinion, would reflect the sentiments of individuals who are actively engaged or have been previously engaged through the various iProperty portals.
Why is this important? Because individuals who are either actively engaged with or have been engaged previously on iProperty can be speculated to have either some focus or a great deal of focus on properties. While this is an excellent piece of work done and I’m sure it took tremendous effort on their part, I would advice that the results are taken objectively and not as the definite representation of the individual markets surveyed.
Some highlights from iProperty’s report:
It’s interesting to note that Malaysian’s amongst the various countries surveyed indicated that 41.1% of respondents owned more than a single property. This is in stark comparison to Hong Kong’s 15.7% for ownership of more than one property. The variation between the high and low reported here could be due to a variety of factors amongst them being expected revenue from rental & potential capital gains, cost of entry for ownership and lending services and regulations within each specific country.
Property prices in Malaysia as far as I know has been climbing by leaps and bounds between 2010 to 2011 and has some what stabilized in recent months. This dramatic growth in property value could have potentially fueled a purchase spree by investors seeking to leverage on potential capital gains as prices increase.
But the next chart should be indicative of the potential difficulty for first-time property owners with Hong Kong showing the highest number of non-owners at 40.6% while the lowest country for non-owners reported was Singapore with only 23% reporting that they have not purchased any property at the time of the survey.
There are potentially a large variety of factors which could potentially be influencing this, from high prices, low income, unwillingness to purchase outside potentially high priced neighbourhoods and even stringent lending policies by financiers. It’s anyone’s best guess as to why with the exception of Hong Kong, non-ownership trends seem to be at a similar average across the different markets.
While Indonesia and Hong Kong show quite a balanced split between properties purchased for own use and those purchased for investments either from a rental or resale perspective. However the markets of Malaysia and Singapore indicate that a greater majority of purchases are made for incremental revenue from either rental or resale with higher concentrations for supplementary income from rentals being the main motivational driver within these two markets.
A concern however would be that pure investor activities in Malaysia and Singapore could potentially be the tipping scale driving prices up in the long term if genuine self-consumption property owners are being effectively locked out of the market as an effect of speculative activities. The governments of both Malaysia and Singapore have recently introduced new measures to control this in their respective markets but the results of these measures are not clearly evident at this point.
While properties are generally a good long-term investment, too much speculative activity in any given market would be a cause for concern, especially if prices are inflated greatly within a short period of time. It’s good that corrective measures have been introduced to curb speculation in certain markets, but it would definitely be even better if Hong Kong could some how improve the ability to own homes for its citizens.
To download the full copy of the iProperty Asia Property Market Sentiment Report, CLICK HERE.Image source: iProperty – Asia Sentiment Survey Report 2012