Singapore Property | Even after the Real Estate Sentiment Index (RESI) reported a slight improvement in the Q4 of 2018, Singapore developers are still doubtful about the condition of the property market.
RESI is an outcome of collaborative efforts between Real Estate Developer’s Association of Singapore (REDAS) and the Department of Real Estate (DRE) of the celebrated National University of Singapore. It draws its inspiration from a survey carried out among senior managers of REDAS subsidiary firms.
The survey demonstrated that the Current Sentiment Index increased from 3.9 in the third quarter of 2018 to 4.2 in the fourth quarter of 2018. Within the same duration, the Future Sentiment Index rose from 4.2 to 4.3. These statistics show quarter-on-quarter improvement of between 4.0 and 4.3 in the total sentiment.
A score above 5 is a sign that the market conditions are improving while a lower one signifies worsening market conditions.
Developers expressed the pessimism about the property market by describing their anticipations for 2019 with terms like ‘unclear,’ ‘deteriorating,’ ‘vigilant,’ and ‘challenging.’
According to the developers, an oversupply of new property launches, the increasing rate of inflation/interest and a drop in the global economy are the three possible risk factors that could negatively influence market sentiment over next half a year.
The survey revealed that the majority of the developers (95.1 percent) believed the cooling measures enforced in July 2018 diminished the outlook of the property market in 2019. Although 82 percent predict the en bloc sale market will be the most affected, 50.8 percent don’t foresee enforcement of more cooling measures by the government this year. Around 45.2 percent of the developers expressed their intentions to increase their new launches significantly over the next half a year, with 38.7 percent revealing their plans to increase their new launches moderately over the same period. Those who promised to reduce their new launches slightly were just 6.5 percent.