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There was a reversal of market sentiment among Singapore home builders after the new property cooling measures were introduced on 6 July, reported the Business Times.
In fact, the Real Estate Sentiment Index (RESI) compiled by the National University of Singapore (NUS) and the Real Estate Developers’ Association of Singapore (REDAS) plunged from 6.6 in Q2 2018 to 3.9 after the new property cooling measures were introduced.
Notably, RESI denotes overall market sentiment. A score above 5.0 signifies improving market conditions, while a figure below that indicate worsening conditions.
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RESI is made up of the Current Sentiment Index and Future Sentiment Index, which respectively fell from 6.7 to 3.9 and 6.4 to 4.0. The latter gauges developers’ perception of market conditions in the last six months, while the other assesses their outlook over the next six months.
Despite after the imposition of the new curbs, 65 percent of respondents still expect more new launches, but this is down from 87.9 percent during the second quarter.
However, the majority now believes that prices of new private condos are unlikely to increase, with only 13.5 percent of developers expecting a hike in prices compared to 81.8 percent who held this sentiment in Q2 2018.
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Furthermore, just 3.0 percent of respondents thought that prices of new private condos will fall in the second quarter, but after the new property curbs took effect, 48.6 percent now believe that prices will decline.