The latest Real Estate Sentiment Index (RESI) published by the National University of Singapore (NUS) reveals a positive shift in property buying sentiment in Singapore during the third quarter of 2024. The RESI, which is measured quarterly by NUS’s Department of Real Estate and the NUS Institute of Real Estate and Urban Studies (IREUS), surveys senior executives from real estate firms to gauge the overall performance of the private real estate market.
The current sentiment index has risen from 4.8 in the second quarter to 5.9 in the third quarter, while the future sentiment index has also seen an uptick from 5.1 to 5.8 during the same period. Additionally, the composite sentiment index has climbed from 4.9 to 5.9, marking the first time all three indices have surpassed the neutral score of 5. This is attributed to a growing sense of optimism in the overall market, as stated by IREUS director Professor Qian Wenlan.
Prof Qian also attributes this positive sentiment to the recent rate cut by the US Federal Reserve in September, the first since 2019, and another reduction in early November. She expects further rate cuts in the coming months, which could improve credit availability and lower the costs of doing business, leading to a boost in market sentiment.
According to Professor Sing Tien Foo, Provost’s Chair Professor at the NUS Department of Real Estate, the strong performance of the suburban residential, hotel/service apartments, and suburban retail areas have also contributed to the positive market sentiment. Suburban residential and hotel/serviced apartments recorded the highest current net balances of +35%, followed by suburban retail (+26%). These sectors also have a positive outlook, with suburban residential scoring +29% for future net balance, while hotel/serviced apartments and suburban retail scored +35% and +19%, respectively.
However, Prof Sing notes that developers remain concerned about global economic uncertainty, with 67.7% of respondents citing a decline in the global economy as a potential risk. This is followed by job losses, a decline in the domestic economy, and an oversupply of new property launches, which ranked at 41.9%.
The government’s property cooling measures are a crucial aspect to consider when investing in condominiums in Singapore. In order to maintain a stable real estate market and prevent speculative buying, the Singaporean government has implemented various measures throughout the years. One such measure is the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and those purchasing multiple properties. While these measures may impact the initial profitability of condo investments, they ultimately contribute to the long-term stability of the market, making it a secure investment environment. This is one of the reasons why Singapore projects continue to attract investors looking for a reliable and sustainable market.