INVESTORS may be turning more cautious on the property market, according to a Credit Suisse survey.

 

It found that 34 per cent ranked cash as their top investment vehicle, followed by residential property at 27 per cent, and the stock market at 23 per cent.

 

Only 21 per cent of the 300 households polled by the Swiss bank about three weeks ago said they would consider buying a property within the next 12 months; 40 per cent did not intend to buy any time soon.

 

Out of the 300 respondents, 78 per cent live in public housing, and 88 per cent own their homes. They are aged between 21 and 70.

 

Credit Suisse analysts Yvonne Voon and Chok Sing Ping said these sentiments suggest transaction volumes will moderate after strong showings in the first four months of the year.

 

This is despite strong household balance sheets, with 47 per cent of the respondents saying they have no mortgage while 46 per cent have only one housing loan.

 

Taking into account other liabilities such as car loans and credit cards, 83 per cent have less than 30 per cent of their household income directed towards mortgage payments.

 

Affordability is also not an issue for many, with 30 per cent having more than $100,000 in cash that can be used for a down payment.

 

About 30 per cent of the respondents would enter the property market for investment purposes, while nearly 70 per cent of to-be buyers had 'genuine' reasons such as upgrading.

 

Nearly half of those surveyed think housing prices will increase, 35 per cent expect them to fall, while 60 per cent expect more cooling measures.

 

The poll also found that 53 per cent of respondents, including those who are not planning to buy a property, think that their decision to purchase will be swayed by government measures.

 

The hardest-hitting measure would be capital gains tax and stamp duties, with 75 per cent of respondents ranking both factors first.

 

The respondents also have high aspirations to upgrade, with 57 per cent preferring private homes to public housing.

 

New is preferred as well: 70 per cent want to buy from developers, only 9 per cent would opt for resale properties, while 62 per cent would rather not buy a shoebox apartment.

 

Pricing was listed as the top consideration for 40 per cent of respondents, but 46 per cent felt that proximity to MRT stations was the most important factor.

 

Ms Voon and Mr Chok said in their note: 'We believe that the land sale for projects which are close to the MRT stations should continue to see stiff competition, which could mean prices for the mass market projects may remain high.

 

'While we have determined that affordability is not really a significant issue at this point, given the rising wages on the back of low unemployment, and a low interest rate environment, we highlight that 85 per cent prefer to spend less than $1 million on a property.'

 

Project manager Benjamin Chew, who recently bought a Build-to-Order flat in Punggol, said he was priced out of the private property market.

 

As with many other Singaporeans, location was a big factor for him and his girlfriend.

 

Mr Chew, 28, said: 'Both of us didn't want to be too far from our parents, so Punggol is ideal as it is right in the middle. My girlfriend opted for a block closer to the main street and the train station.'

 

He added that while he believes prices should stabilise and trend upwards in the long run, it is unlikely that he will enter the market for investment in the next decade.

 

'I intend to treat my house as a home, not as an investment opportunity,' he said.