reporter2
24-10-14, 12:11
http://www.businesstimes.com.sg/real-estate/spore-developer-sentiment-up-slightly
S'pore developer sentiment up slightly
By Kenneth Lim
[email protected]@KennethLimBT
24 Oct
SENTIMENT among Singapore property developers ticked up slightly but remained weak, according to a survey by the National University (NUS) and the Real Estate Developers' Association of Singapore (Redas).
The overall sentiment gauge improved slightly to 3.7 in the third quarter from 3.5 in the second quarter, but remained below the 5.0 threshold above which sentiment is considered to be positive. The third quarter was the fifth period in a row in which sentiment was 4 or lower.
The indicator of current sentiment improved modestly to 3.7 versus 3.6 the previous quarter.
The future sentiment indicator also edged up slightly to 3.6 from 3.4, suggesting that the outlook for the next six months remained dull.
"The continued weakening of the market sentiment implies that price corrections are expected to persist in the future," NUS associate professor Sing Tien Foo said. "And developers are expected to face strong headwind ahead trying to improve sales of new residential projects in the next six months."
Prime and suburban residential sectors had the bleakest outlooks. The prime residential sector showed a current net sentiment balance of -76 per cent. Although net sentiment for the next six months monderated to -63 per cent, it was still the worst sector in terms of future outlook.
Suburban residential current net sentiment balance was -61 per cent, easing slightly to -57 per cent over the longer term.
All sectors had negative current sentiment balances except for offices, which had a 50 per cent positive balance. But the outlook for offices eased to positive 43 per cent when looking at the next half-year.
"Residential market will continue to consolidate," said a developer who took part in the survey. "Industrial market is waiting to cool too as a result of government pushing out more sites. Office sector will likely outperform."
Respondents were most concerned about a potential slowdown in the global economy, with 70.3 per cent describing that as a possible risk.
Rising inflation and interest rates was the next biggest worry, with 67.2 per cent citing these as potential risks. The excessive supply of new property launches and rising costs of construction have also been viewed by the majority to adversely impact the market sentiment.
But fears of a real estate price bubble, a decline in the domestic economy and government cooling measuers subsided in the current survey.
In terms of supply, 47 per cent expected to see more launches in the next six months, compared to 22 per cent that expected fewer and 31 per cent who expected the same.
But 71 per cent predicted that new launch prices would come down, compared to just 3 per cent who expected higher new launch prices and 26 per cent expecting new unit prices to stay the same.
About 63 per cent of the respondents expected the new Thomson East Coast train line to improve prices around the proposed stations, but about 51 per cent expected broader market pressures to mute those positive effects. About 19 per cent of respondents felt that there would be no immediate impact on demand and prices around the proposed stations.
S'pore developer sentiment up slightly
By Kenneth Lim
[email protected]@KennethLimBT
24 Oct
SENTIMENT among Singapore property developers ticked up slightly but remained weak, according to a survey by the National University (NUS) and the Real Estate Developers' Association of Singapore (Redas).
The overall sentiment gauge improved slightly to 3.7 in the third quarter from 3.5 in the second quarter, but remained below the 5.0 threshold above which sentiment is considered to be positive. The third quarter was the fifth period in a row in which sentiment was 4 or lower.
The indicator of current sentiment improved modestly to 3.7 versus 3.6 the previous quarter.
The future sentiment indicator also edged up slightly to 3.6 from 3.4, suggesting that the outlook for the next six months remained dull.
"The continued weakening of the market sentiment implies that price corrections are expected to persist in the future," NUS associate professor Sing Tien Foo said. "And developers are expected to face strong headwind ahead trying to improve sales of new residential projects in the next six months."
Prime and suburban residential sectors had the bleakest outlooks. The prime residential sector showed a current net sentiment balance of -76 per cent. Although net sentiment for the next six months monderated to -63 per cent, it was still the worst sector in terms of future outlook.
Suburban residential current net sentiment balance was -61 per cent, easing slightly to -57 per cent over the longer term.
All sectors had negative current sentiment balances except for offices, which had a 50 per cent positive balance. But the outlook for offices eased to positive 43 per cent when looking at the next half-year.
"Residential market will continue to consolidate," said a developer who took part in the survey. "Industrial market is waiting to cool too as a result of government pushing out more sites. Office sector will likely outperform."
Respondents were most concerned about a potential slowdown in the global economy, with 70.3 per cent describing that as a possible risk.
Rising inflation and interest rates was the next biggest worry, with 67.2 per cent citing these as potential risks. The excessive supply of new property launches and rising costs of construction have also been viewed by the majority to adversely impact the market sentiment.
But fears of a real estate price bubble, a decline in the domestic economy and government cooling measuers subsided in the current survey.
In terms of supply, 47 per cent expected to see more launches in the next six months, compared to 22 per cent that expected fewer and 31 per cent who expected the same.
But 71 per cent predicted that new launch prices would come down, compared to just 3 per cent who expected higher new launch prices and 26 per cent expecting new unit prices to stay the same.
About 63 per cent of the respondents expected the new Thomson East Coast train line to improve prices around the proposed stations, but about 51 per cent expected broader market pressures to mute those positive effects. About 19 per cent of respondents felt that there would be no immediate impact on demand and prices around the proposed stations.