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Real estate market sentiment continues to weaken in 3Q2015: NUS-REDAS RESI

By Lin Zhiqin

/ The Edge Property |

October 22, 2015 5:40 PM SGT

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The overall sentiment for Singapore’s real estate market, based on the Real Estate Sentiment Index (RESI), was weak at 3.7 in 3Q2015. The index was jointly developed by the Department of Real Estate, National University of Singapore (NUS), and the Real Estate Developers’ Association of Singapore (REDAS). RESI is derived from quarterly surveys conducted among senior executives of REDAS member firms. It can range from 0 to 10, reflecting the degree of pessimism or optimism of the respondents.

The index measuring current sentiment slid from 3.9 in 2Q2015 to 3.7 in 3Q2015, while the future sentiment index deteriorated from 4.0 to 3.7 over the same period. Respondents to the latest survey rated prime retail the worst performing sector, with the office sector a close second from the bottom. Business park and Hi-tech space, and suburban retail were rated the best performing sectors, albeit with smaller negative ratings ranging from -21% to -27%.

A whopping 92.2% of respondents indicated a global economic slowdown as potential risk to market sentiment in the next six months. 76.6% also expect adverse impact from rising inflation and interest rates.

Over the coming six months, 72.5% of the surveyed developers expect new launches to hold steady or increase slightly, while 20.0% indicated that they would cut back on units launched. A moderate decrease in residential property prices is anticipated by 60.0% of developers, while only 30.0% expect prices to hold firm. In comparison, 21.9% of developers surveyed in 2Q2015 expected prices to hold steady.

83.1% of respondents felt that the existing cooling measures should be tweaked or lifted over the next two quarters. 60.8% indicated that Additional Buyers’ Stamp Duty (ABSD) should be lifted, and 56.7% felt Sellers’ Stamp Duty (SSD) should be lifted.

On the issue of unsold stock, 82.3% of respondents felt that developers should adjust new launch prices downwards to move inventory.

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