Property market sentiment highest since 1Q2010: NUS-REDAS index

By Angela Teo / The Edge Property | July 21, 2017 10:02 AM SGT
Overall sentiment for the real estate market reached 6.1 in 2Q2017, the highest since 1Q2010, according to the Real Estate Sentiment Index (RESI) published by the National University of Singapore and the Real Estate Developers’ Association of Singapore (Redas). Market sentiment continued to improve from 5.2 in 1Q2017. However, it is still lower than the 6.8 registered in 1Q2010.
Each quarter, NUS and REDAS conduct a survey amongst senior executives of REDAS member firms to measure real estate market sentiment in Singapore. A scale of 0 to 10 reflects pessimism or optimism of respondents towards the market, 0 being pessimistic, 10 being optimistic. A score above five indicates improving market conditions.
Both the indices reflecting current sentiment and future sentiment saw improvement from 1Q2017 when they were at 5.2. in 2Q2017, the Current Sentiment Index went up to 6.1 while the Future Sentiment Index increased to 6.2.
NUS-REDAS index results for 2Q2017 - EDGEPROP SINGAPORE
Respondents indicated greatest confidence in the prime and suburban residential sectors. Meanwhile, they were least optimistic about the prime retail sector, followed by the suburban retail sector and the industrial and logistics sector.
68% of respondents indicated rising inflation and interest rates as the greatest risk to market sentiment in the next six months, while 66.7% expect negative impact from global economic slowdown and job losses.
42.9% of surveyed developers anticipate a moderate increase in new launches in the next six months, and 45.7% of respondents expect residential property prices to increase moderately.
85% of respondents indicated greater interest in en bloc sales. Primary reasons given were the replenishment of land banks for long-term business sustainability, and intense competition for limited sites under the Government Land Sales (GLS) programme.