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Thread: Sentiment in property market 'still weak'

  1. #1
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    Default Sentiment in property market 'still weak'

    http://www.straitstimes.com/business...ket-still-weak

    Sentiment in property market 'still weak'

    Developers were slightly more positive about Singapore's real estate market in the first quarter than they were late last year.

    May 7, 2016

    Rennie Whang


    Developers were slightly more positive about Singapore's real estate market in the first quarter than they were late last year.

    However, on balance, they expected things to get worse, according to the latest NUS-Redas Real Estate Sentiment Index survey.

    The Current Sentiment Index rose from 3.6 in the fourth quarter to 3.9 in the first quarter, while the Future Sentiment Index rose from 3.4 to 3.6.

    "However, the general mood of the market is still weak as the sentiment scores still fall in the deteriorating range," Associate Professor Sing Tien Foo, of the National University of Singapore's Department of Real Estate said in a statement.

    A sub-five reading indicates expectations of deteriorating conditions. A score above five reflects forecasts of improving conditions.

    While sentiment across all eight property sectors was negative, it seemed to be poorest for office, suburban residential and prime retail sectors.

    In terms of potential risks that could hurt sentiment in the next six months, 84.4 per cent of respondents said they expected the global economy to slow down, and 68.8 per cent expected job losses and declines in the domestic economy to affect sentiment.

    Excessive supply through new property launches was also a potential risk, they said.

    When asked about supply expectations, a third of developers expected the number of new launches to rise moderately and 52.8 per cent expected it to hold at the same level in the next half year. Just 13.9 per cent indicated they would launch fewer units .

    As for price changes, 47.2 per cent expected prices to fall in the next half year. Another 44.4 per cent expected prices to hold.

    The majority of the respondents - 58.4 per cent - also indicated property market conditions would worsen if the Government maintained the cooling measures.

    One noted that institutions have downgraded their outlook for global and Singapore growth.

    "Singapore as an 'open' country is very susceptible to global ebbs. Singapore real estate market is going to be highly affected by these negative sentiments."

    However, "some short-term resilience could be expected in the capital market due to the low interest rate and large liquidity pool," he added.

  2. #2
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    Default Developers still gloomy about prospects

    http://www.businesstimes.com.sg/real...bout-prospects

    Developers still gloomy about prospects

    Despite slight uptick, real estate sentiment index remains under 5 in latest NUS-Redas survey

    By Mindy Tan

    [email protected]

    @MindyTanBT

    May 7, 2016


    DEVELOPER sentiment remains weak, according to the latest NUS-Redas Real Estate Sentiment Index, with the composite sentiment index remaining below 5.

    The index (which is a derived indicator for the overall real estate market sentiment in Singapore) inched up to 3.8 in the first quarter from 3.5 in Q4 last year. Correspondingly, the current sentiment index rose to 3.9 from 3.6, and the future sentiment index climbed to 3.6 from 3.4.

    A score below 5 indicates deteriorating market conditions while a reading above 5 indicates improving conditions.

    Associate professor Sing Tien Foo of the NUS Department of Real Estate noted that while there is a slight upturn in the current and future sentiment in the property market, the general mood remains weak as the sentiment scores still fall in the deteriorating range (below 5).

    Developers were largely cool towards the government's stance to keep current property cooling measures in place. About 58.4 per cent of respondents indicated that property market conditions will worsen further, with 55.8 per cent saying the additional buyer's stamp duty (ABSD) and total debt servicing ratio (TDSR) dampen demand.

    One of the respondents in the survey said: "Given that cooling measures have remained unchanged and the overall sentiment remains muted, the market is unlikely to be strong enough to withstand any increase in prices. Developers are likely to maintain or lower prices moderately to move units."

    A third of the developers surveyed said they expect new launches to increase moderately while 52.8 per cent expect them to hold at the same level over the next half-year. About 13.9 per cent indicated that they would launch moderately fewer units, compared with 23 per cent in the previous quarter. On price changes, 47.2 per cent anticipate a moderate decrease in residential property prices in the next six months while 44.4 per cent expect prices to hold.

    The three property market sectors with the lowest net balance scores are office, suburban residential, and prime retail. Current and future net balance percentages are used to indicate current and future sentiment about real estate development and market conditions in Singapore. They are based on the difference between the proportion of respondents who have selected the positive and negative options.

    The office sector was the worst performing sector with a current net balance of -63 per cent and a future net balance of -69 per cent; the suburban residential sector has a current net balance of -50 per cent and a future net balance of -58 per cent; and the prime retail sector shows a current net balance of -64 per cent and a future net balance of -57 per cent.

    In terms of potential risks, 84.4 per cent of respondents said they expect the global economy to slow down and 68.8 per cent said they expect job losses and declines in the domestic economy to adversely impact market sentiment in the next six months. A further 46.9 per cent foresee that the property market will face rising inflation, rising interest rates, and tightening of finance and liquidity.

    They also warned that excessive supply through new property launches is a potential risk that will adversely impact market sentiment.

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