Are property developers overly bearish?

By EdgeProp Singapore / EdgeProp | September 7, 2018 3:30 PM SGT
Developer sentiment has darkened significantly following the government’s announcement of the new property cooling measures, according to a recent survey done by the National University of Singapore (NUS) and the Real Estate Developers’ Association of Singapore (REDAS).
According to the NUS-REDAS Real Estate Sentiment Index (RESI) report, outlook for prime residential and suburban residential sectors were hit the hardest after the cooling measures. In comparison, outlook for business-park/hi-tech space and hotel/serviced apartments were unaffected.
RESI comprises a Composite Sentiment Index, a derived indicator for the current overall market sentiment; a Current Sentiment Index and a Future Sentiment Index, which track changes in sentiments over the past and the next six months respectively.
Prior to the announcement of the latest cooling measures on July 5, NUS and REDAS had earlier completed the report on developer sentiment for 2Q2018. A follow-up survey that was done after the cooling measures saw the Composite Sentiment Index plunge from 6.6 to 3.9.
The Current Sentiment Index was also revised downward from 6.7 to 3.9, while The Future Sentiment Index fell from 6.4 to 4.0.
According to REDAS, a score below five indicates deteriorating market conditions, while scores above five indicate improving conditions.
Developers’ sentiment pre-and-post cooling measures
1) Real Estate Sentiment Index (1Q2010 – 2Q2018)
Source: NUS-Redas Research
2) Comparison of Pre- and Post-Measures Sentiments
Source: NUS-Redas Research
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