Property Market Sentiment Improves 3Q2024 Boosted Interest Rate Cuts Nus
According to the latest Real Estate Sentiment Index (RESI) published by the National University of Singapore (NUS), property buying sentiment in Singapore has seen a turnaround in the third quarter of 2024. The RESI, which surveys senior executives of real estate firms to measure the prevailing sentiment of the private real estate market, is conducted quarterly by NUS’s Department of Real Estate and the NUS Institute of Real Estate and Urban Studies (IREUS).
The current sentiment index jumped from 4.8 in the second quarter of 2024 to 5.9 in the third quarter, while the future sentiment index also saw an increase from 5.1 to 5.8 during the same period. In addition, the composite sentiment index rose to 5.9, crossing over the neutral score of 5 for the first time. This rise in sentiment levels is attributed to a growing optimism in the market, according to IREUS.
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Professor Qian Wenlan, Director of IREUS, believes that the positive sentiment is a result of the US Federal Reserve’s rate cut in September, the first since 2019, and another reduction in November. With more rate cuts anticipated, the availability of credit and the cost of doing business are expected to improve, which would further boost sentiment.
Additionally, Professor Sing Tien Foo, Provost’s Chair Professor at the NUS Department of Real Estate, notes that the performance of the suburban residential, hotel/service apartments, and suburban retail sectors has also contributed to the overall positive sentiment in the market. The current net balances for these sectors were +35%, +35%, and +26% respectively, while their future net balances were +29%, +35%, and +19%.
However, the top risk concern for developers remains the global economic uncertainty, with 67.7% of respondents citing it as a potential risk. This is followed by job losses, a decline in the domestic economy, and an excess supply of new property launches, all of which were ranked at 41.9%.