Property market sentiment among property players fell in the second quarter, with the slowdown most evident in the suburban residential segment, according to a recent survey by the National University of Singapore (NUS) and the Real Estate Developers’ Association of Singapore (REDAS).
Wong Heang Fine, President of REDAS, said that property developers are looking forward to a break from more government tightening measures, arguing that the private residential market should be given an opportunity to achieve equilibrium.
The survey revealed that the Current Sentiment Index (CSI) fell from 4.9 in Q1 2011 to 4.6 in Q2 2011, while the Future Sentiment Index (FSI) witnessed a significant decline, from 5.1 in Q1 2011 to 4.4 in Q2 2011.
The Composite Sentiment Index, derived from the CSI and FSI, fell from 5 in Q1 2011 to 4.5 in Q2 2011.
“Macro factors beyond the local property scene may have weighed more heavily on sentiment in Q2 2011,” said Steven Choo, REDAS Chief Executive Officer.
In addition, the respondents’ list of potential risks includes moderation of the world economy, increased supply of new development land and government intervention.
“If the government gets into a habit of intervening all the time, it will harm market development. Investors won’t want to invest because they can’t be sure what the government is going to do Monday versus Friday,” said Wong.
The survey also revealed that in Q2 2011, 20 percent of the respondents perceived unit prices in the primary housing market to be considerably higher, compared with 14 percent in Q1. About 63 percent expected unit prices to be mostly unchanged, slightly lower than 69 percent in Q1.
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