Property Market Sentiment Improves 3Q2024 Boosted Interest Rate Cuts Nus
In the latest publication of the Real Estate Sentiment Index (RESI) by the National University of Singapore (NUS), property buying sentiment in Singapore has seen a positive shift in the 3rd quarter of 2024. The RESI, which surveys senior executives of real estate firms, measures the general sentiment of the private real estate market and is conducted quarterly by NUS’s Department of Real Estate and Institute of Real Estate and Urban Studies (IREUS).
Compared to the previous quarter where the sentiment index was at 4.8, the current sentiment index has risen to 5.9 in the 3rd quarter of 2024. The future sentiment index has also increased from 5.1 in the 2nd quarter to 5.8 in the 3rd quarter. The composite sentiment index has also improved, climbing from 4.9 in the 2nd quarter to 5.9 in the 3rd quarter. This is the first time that all three indices have surpassed the neutral score of 5, indicating a growing optimism in the market.
IREUS director Professor Qian Wenlan believes that this positive shift in sentiment can be attributed to the interest rate cut by the US Federal Reserve in September, the first since 2019, and another reduction in November. She also anticipates more cuts in the coming months, which would improve credit availability and the cost of doing business, ultimately boosting market sentiment.
According to Professor Sing Tien Foo, Provost’s Chair Professor at the NUS Department of Real Estate, the positive performance of the suburban residential, hotel/service apartments, and suburban retail areas has also contributed to the overall market sentiment. Suburban residential and hotel/serviced apartments have recorded the highest current net balances of +35%, followed by suburban retail (+26%). The outlook for these sectors is also promising, with suburban residential scoring +29% for future net balance, and hotel/serviced apartments and suburban retail scoring +35% and +19% respectively.
However, developers still have concerns about the global economic uncertainty, with 67.7% of respondents indicating a decline in the global economy as a potential risk. This is followed by job losses, a decline in the domestic economy, and an excessive supply of new property launches, all of which ranked at 41.9%.
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