After dropping for four straight quarters, the REDAS-NUS Real Estate Sentiment Index (composite) for Singapore’s real estate market climbed in the first quarter of 2012 to reach 4.6, driven by strong demand of several mass market private condo launches.
The scale for the index used in the survey ranges between 0 and 10, with a score of less than five indicating falling market conditions while more than five shows an improving market.
The Current Sentiment Index climbed to 4.8 in the first quarter from 3.5 in the fourth quarter of last year. For this index, the survey asked respondents to rate Singapore’s current property market conditions compared with six months ago.
Meanwhile, the Future Sentiment Index, which pertains to respondents’ rating on property market conditions over the next six months, rose to 4.4 percent in Q1 compared with 3.1 percent in the preceding quarter.
Nearly 77 percent of the developers polled said they expect more residential launches, up from 54 percent in the previous quarter. Nearly 76 percent of them also expect the current level of interest to remain for the Government Land Sales (GLS) Programme, more than twice the 36 percent recorded in the previous quarter.
On the issue of aggressive bidding in land tenders, nearly 68 percent of respondents agreed that simultaneous site launches could moderate the level of bidding. Several analysts said this is already being practiced by the government.
“Tenders should close on the same day, rather than launched on the same day with different closing dates, to reduce competition for sites and aggressive bidding,” said those surveyed.
Overall, respondents were cautiously optimistic about the performance of Singapore’s property market, returning better net balances in current and future performance scores compared with the previous quarter.
“The survey showed a rebound in the overall sentiment but the improvement was not across the board,” said Lee Suan Hiang, Chief Executive of REDAS.
“While the hotel/service apartment sector was a strong performer, the office sector showed weaker sentiment. In the residential sector while the market expressed confidence in the suburban sector, the lack of vitality in the prime residential sector was accentuated with dampened sentiments, protracted over the last three quarters.”
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