[B][SIZE=5]Developer sentiment worsens further[/SIZE][/B]

[B]NUS-Redas Real Estate Sentiment Index shows overall market sentiment in S'pore fell to 3.4 in Q4 from 3.7 in Q3[/B]

By Kenneth Lim

[email][email protected][/email]@KennethLimBT

27 Jan

EXPECTATIONS of worsening property market conditions grew stronger in the fourth quarter of 2014 among Singapore real estate developers and the residential outlook remained gloomy, according to a survey by the Real Estate Developers' Association of Singapore (Redas).

The NUS-Redas Real Estate Sentiment Index showed that overall market sentiment in Singapore fell to 3.4 in the fourth quarter from 3.7 in the third quarter. A sub-five reading indicates expectations of deteriorating conditions, while a score above five reflects forecasts of improving conditions.

"The continual weakening of the market sentiment in this quarter was mainly driven by poor performance in the residential sectors," National University of Singapore associate professor Sing Tien Foo said in a statement. "'Feel good' factors that will lift the residential property market sentiment are not on the horizon."

Sentiment about the residential sector remained the most bleak.

The difference between the proportion of respondents who picked positive options and those who picked negative answers showed a net minus-59 per cent current balance for the prime residential sector. The balance was minus-61 per cent for future sentiment for that sector.

The suburban residential sector had a current net balance of minus-52 per cent, worsening to minus-65 per cent when looking at the future.

The office sector, however, remained resilient. The current net balance for office properties was a positive 38 per cent. That balance when respondents were asked about future sentiment.

About 65.6 per cent of the respondents thought that the market will ace excessive suppy from new launches.

Asked about new supply expectations, 35.1 per cent expected new launches to hold at the same level in the next six months. Another 32.4 per cent saw moderately more launches.

The proportion of developers who expected to launch moderately fewer units rose to 16.2 per cent from 12 per cent in the third quarter.

A prediction of a moderate decline in residential property prices in the next six months was given by 70.3 per cent of the developers surveyed. But 24.3 per cent expected the price to hold.

More than 70 per cent of the respondents projected that property prices will fall by 5-10 per cent in 2015, and that new sales volumes will decline by 15-20 per cent in the same period.

About 43.5 per cent of the respondents said that they hoped that the government would review property cooling measures such as the Additional Buyers' Stamp Duty, Seller's Stamp Duty and Total Debt Servicing Ratio (TDSR) in 2015.

"One respondent commented that pricing of new residential launches in the next six months is expected to be lower by about 10 per cent because of TDSR; and after Chinese New Year in 2015, developers are likely to load off their stocks and to re-launch existing units. Developers do not see the government relaxing any measures soon," Redas said in a statement.