Singapore developers more pessimistic: survey
Photo: Someformofhuman/Wikimedia Commons
Business sentiment among property developers in Singapore fell further in Q4 2015, reported The Business Times, citing a survey by the Real Estate Developers' Association of Singapore (Redas) and the National University of Singapore (NUS).
The Current Sentiment Index, which monitors changes in sentiment during the last six months, dipped to 3.6 in Q4 from 3.7 in the previous quarter.
On the other hand, the Future Sentiment Index, which monitors sentiment in the next six months, dropped to 3.4 in Q4 from 3.7 in the quarter before.
As a result, the Composite Sentiment Index slid to 3.5 from 3.7 previously. A score of less than five indicates deteriorating market conditions while a score of more than five implies improving conditions.
Conducted among senior executives of Redas member firms, the quarterly survey showed that nine in 10 developers expect the global economy to slow down, with three in four expecting the increase in interest rates and inflation to affect market sentiment over the next six months.
Job losses, decline in domestic economy, excessive supply of new property launches are other potential risks that will adversely impact the market sentiment, the report said.
Meanwhile, seven in 10 of the respondents expect new launches to moderately increase, while more than a fifth of the developers said they will launch relatively fewer units.
On price changes, six in 10 expect residential property prices to drop moderately in the next six months.
As for the impact of the cut in supply of the first half 2016 Government Land Sales (GLS) programme, around six in 10 anticipate minimal impact on demand in the commercial and residential property sectors.
One developer noted that a lack of new launches may see buyers revisiting the secondary market. The lower GLS supply will provide support for prices, which lead to lower new developer sales. Some buyers will revisit unsold and resale units in existing projects.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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