Developers in Singapore are becoming more optimistic than ever about the current and present state of property market. However, they are worried about the Government introducing more cooling measures in the market.
A survey from NUS-Redas show that developers worry upturn in property market may only result in more cooling measures.
In the third quarter, the Real Estate Sentiment Index (Resi) had a composite reading of 6.6 from 6.1 in the second quarter. Resi was jointly developed by the Real Estate Developers’ Association of Singapore (Redas) and the Department of Real Estate at the National University of Singapore.
The composite index provides an overall indicator of sentiment. During the third quarter, the current sentiment index has increased to 6.5 compared to the second quarter with 6.1. The future sentiment index, on the other hand, has increased to 6.7 in the third quarter, while 6.2 on the second quarter.
The Associate Professor Sing Tien Foo of NUS’ Department of Real Estate/Institute of Real Estate Studies said, “The high sentiment scores indicate a robust and broad-based recovery especially in the residential and office property markets. The optimistic sentiments in the third quarter were consistent with increases in recent housing transactions and en bloc sales activities in the market. If the positive sentiments were translated into higher housing prices, developers are worried about the possible introduction of more rounds of cooling measures by the Government.”
The NUS-Redas survey also found out that respondents are more anxious about the supply side factors today compared with the second quarter. These supply side factors include new land, new project launches and speculative activities. 57.4% of the respondents are expecting the slowdown in the global economy would be the major threat to the sector in the next six months. The 50.8% deemed rising interest rates as the main potential risk.
Other potential risks identified include a potential decline in the domestic economy (36.1%), and an excessive supply of new property launches (34.4%). The results came from the quarterly structured questionnaire survey that is conducted among senior executives of Redas member firms.