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Property developers slightly more upbeat in fourth quarter

Published on Feb 07, 2014

By Rachael Boon


PROPERTY developers in Singapore remained cautious in the fourth quarter of last year, though marginally less so, a new survey has found.

The Real Estate Sentiment Index (Resi) survey released on Tuesday reflected the soft local property market.

An indicator for overall real estate market sentiment, the composite sentiment index rose to four from 3.9 the previous quarter. But the reading is still under five, which signals deteriorating market conditions. Above five means better conditions. The separate current sentiment index rose to 4.1 from 3.9, while the future sentiment index rose to four from 3.9.

"Despite the slight increase in the sentiment index in the fourth quarter, the overall market sentiment was still below the neutral line of five," said Associate Professor Sing Tien Foo of the department of real estate at the National University of Singapore (NUS).

The Resi is put together by the Real Estate Developers' Association of Singapore and the NUS department. The quarterly questionnaire is answered by senior executives of Redas member firms.

Prime and suburban residential sectors were the worst performing sectors in the quarter, it found, while the office sector was seen to be the best performing.

Looking at residential property, 38.9 per cent of developers expect the number of property launches to remain steady.

About 63 per cent of respondents expect unit prices to drop in the next six months, up from 51.3 per cent in the previous quarter.

Higher land costs were a concern for 46 per cent.

The cost of labour was also an issue for 54.3 per cent of developers, but that was down from 59 per cent in the third quarter.

Another concern was the curb on mortgages for executive condominiums, with 72 per cent saying this would affect demand for these homes.

But on an upbeat note, 71 per cent of developers said the most attractive feature of the draft Masterplan 2013 was the plan for the Greater Southern Waterfront.

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