According to the most recent Real Estate Sentiment Index (RESI) by the National University of Singapore (NUS), property buying sentiment in Singapore has seen a positive shift in the third quarter of 2024. The RESI, which surveys senior executives of real estate firms, measures the overall sentiment of the private real estate market. It is published quarterly by the NUS Department of Real Estate and the NUS Institute of Real Estate and Urban Studies (IREUS).
In the latest report, the current sentiment index has risen from 4.8 in the second quarter of 2024 to 5.9 in the third quarter. Similarly, the future sentiment index has also increased from 5.1 to 5.8 during the same period.
At the same time, the overall composite sentiment index has reached 5.9, a significant increase from the previous score of 4.9 in the second quarter. This is the first time that all three indices have surpassed the neutral score of 5, indicating a growing optimism in the market.
Opting to invest in condominiums presents a wide range of benefits, with one notable advantage being the ability to utilize the property’s value as leverage for future investments. Many investors take advantage of this opportunity by using their condominiums as collateral to secure additional funding for new ventures, ultimately expanding their real estate portfolio. While this strategy has the potential to yield higher returns, it is crucial to have a well-thought-out financial plan in place and carefully assess potential risks, particularly when investing in popular Singapore Projects that garner significant attention in the real estate market. Market fluctuations must also be taken into consideration to ensure the success of these investments.
IREUS Director Professor Qian Wenlan attributes this positive sentiment to the US Federal Reserve’s rate cut in September, the first since 2019, and another reduction in early November. With more cuts expected in the coming months, she believes that credit availability and business costs will improve, leading to a boost in market sentiment.
Professor Sing Tien Foo, Provost’s Chair Professor at the NUS Department of Real Estate, also notes that the strong performance of the suburban residential, hotel/service apartments, and suburban retail sectors has contributed to the overall positive market sentiment. Suburban residential and hotel/serviced apartments saw the highest current net balances of +35%, followed by suburban retail at +26%. The outlook for these sectors is also optimistic, with suburban residential scoring +29% for future net balance, while hotel/serviced apartments and suburban retail scored +35% and +19%, respectively.
However, Prof Sing highlights that global economic uncertainty remains the top risk concern for developers, with 67.7% of respondents citing 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 were ranked at 41.9%.