Home builders here have become more bullish, but they fear that the improving market conditions would result in more property curbs from the authorities, reported the Straits Times.
In fact, the Real Estate Sentiment Index (RESI) show that property developers’ general sentiment has improved. They also have better views on the prevailing situation as well as future prospects.
This is because, the composite index, which indicates overall sentiment, rose to 6.6 in Q3 2017 from 6.1 in the prior quarter. At the same time, the present sentiment index increased to 6.5 from 6.1, while the future sentiment index climbed to 6.7 from 6.2 previously.
RESI was jointly developed by the Real Estate Developers’ Association of Singapore (REDAS) and the Department of Real Estate at the National University of Singapore (NUS).
“The high sentiment scores indicate a robust and broad-based recovery especially in the residential and office property markets,” said Associate Professor Sing Tien Foo from the Department of Real Estate/Institute of Real Estate Studies at NUS.
“The optimistic sentiments in the third quarter were consistent with increases in recent housing transactions and en bloc sales activities in the market.”
However, Sing noted that home builders are worried that the government could introduce more property cooling measures if residential prices rise significantly in the recovering market.
Their research also discovered that developers are more concerned about supply-related factors like new land, fresh project launches and speculative activities.
In particular, 50.8 percent of the respondents believe that rising interest rates pose the main risk to local property industry over the next six months, while 57.4 percent think that it’s a downturn in the global economy.
36.1 percent also named a slowdown in Singapore’s economy as a risk factor, whereas 34.4 percent are worried about the oversupply of new property launches here.
The quarterly NUS-REDAS survey polled senior executives from property developers.
This article was edited by Keshia Faculin.