Property players’ sentiment weakened in the third quarter, with the residential and office sectors likely to fare worse over the next six months, according to a report in The Business Times.

In the latest survey jointly conducted by the National University of Singapore (NUS) and Real Estate Developers’ Association of Singapore (REDAS), the Current Sentiment Index dropped to 3.6 in Q3 from 4.6 in Q2, while the Future Sentiment Index slipped to 3.4 in Q3 from 4.4 in Q2.

As a result, the Composite Sentiment Index also fell to 3.5 in Q3 from 4.5 in Q2.

Meanwhile, future net balance, which is the difference between respondents who believe the office market will fare better and those who believe it will fare worse, dropped -57 percent in Q3 from +42 percent in Q2.

“The swift downgrade of office real estate sector performance shows how quickly the effects of a strong headwind buffeting the banking and financial services industry are being felt in terms of CBD office space demand,” said REDAS Chief Executive, Steven Choo.

Results from the survey also showed that 55 percent of developers expect more housing units to be launched over the next six months, compared to 70 percent in the previous quarter. Another 33 percent also expect launches to remain at the same level.

Nearly 56 percent of the respondents expect prices to remain unchanged, while 37 percent predict a moderate decline, more than twice the 17 percent recorded in the previous quarter.

“Most developers think that the latest revision in development charge (DC) rates was within market expectations for the landed residential and hotel sectors, but consider the respective hikes of up to 55 percent, 39 percent, and 32 percent too high for the industrial, non-landed residential, and commercial sectors,” according to analysis of the survey.

About 45 percent of the participants expect levels of interest in the Government Land Sales (GLS) programme to remain the same over the next six months, from 65 percent in the previous survey. Additionally, a third of developers also expect the same level of interest in collective land sales, down from 50 percent in Q2, while 61 percent expect to see less interest, an increase from 47 percent in Q2.

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