Developers’ sentiment in the Singapore real estate market has weakened from Q4, according to the Real Estate Sentiment Index (RESI) Survey conducted jointly by the Real Estate Developers’ Association of Singapore (REDAS) and the National University of Singapore (NUS).
The survey showed that the Composite Sentiment Index, which tracks overall property market sentiment in Singapore, dropped for the fourth straight quarter to 3.3, from 5.7 in Q4 last year. The weakened sentiment was more evident in the residential sector, attributed to the impact of the ABSD imposed in early December last year.
“Weaker RESI signals more volatility in the local property market moving forward in 2012,” said Sing Tien Foo, Associate Professor of NUS’ Department of Real Estate.
“Amidst current global risks which are bearing down on market sentiments, persistently low interest rate is one favourable factor that will soften the impact of a fall in house prices, if it happens anytime soon.”
Around 94 percent of the respondents rate the ABSD as having a moderate to significant impact on foreign investment flow in the property market, while nearly 70 percent anticipate a moderate to significant impact on fund flow to foreign markets and spill-over into non-residential property sectors.
Furthermore, around 54 percent of developers expect more residential launches, down from 56 percent in Q3 last year, with 18 percent of them anticipating the number of launches to remain unchanged.
Overall, the survey showed that most respondents see a gloomy outlook for the real estate sector, given the underperformance of the residential and office sectors in the near term. Meanwhile, future net balance for the prime residential and office sector saw a further contraction to -48 percent and -67 percent, from -79 percent and -57 percent in Q4 respectively.
Related Stories:
Vacant homes on the ‘up and up’
Bungalow market picks up speed
S’pore buyers snap up over 90% of The Greenwich