Property Market Sentiment Improves 3Q2024 Boosted Interest Rate Cuts Nus
According to the latest Real Estate Sentiment Index (RESI) published by National University of Singapore (NUS), the sentiment towards property buying in Singapore has seen an improvement in the third quarter of 2024. This index, which measures the overall market sentiment by surveying senior executives of real estate firms, is published quarterly by NUS’s Department of Real Estate and the NUS Institute of Real Estate and Urban Studies (IREUS).
The current sentiment index has increased from 4.8 in the second quarter to 5.9 in the third quarter of 2024. The future sentiment index has also seen an uptick, rising from 5.1 to 5.8 during the same period. Meanwhile, the composite sentiment index has also grown to 5.9 from 4.9 in the second quarter. This is the first time all three indices have surpassed the neutral score of 5, indicating a growing optimism in the market.
IREUS director Professor Qian Wenlan attributes this positive sentiment to the US Federal Reserve’s decision to cut rates in September, which was followed by another cut in early November. She expects further cuts in the future, which could lead to improved credit availability and lower business costs, boosting market sentiment.
Provost’s Chair Professor Sing Tien Foo from the NUS Department of Real Estate notes that the strong performance of the suburban residential, hotel and serviced apartment, and suburban retail sectors have contributed to the overall positive sentiment. These sectors recorded the highest current net balances of +35%, +35%, and +26% respectively. The outlook for these sectors is also optimistic, with suburban residential scoring +29% for future net balance, while hotel and serviced apartments and suburban retail scoring +35% and +19% respectively.
However, Prof Sing highlights that the main risk concern for developers is still 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, which are concerns for 41.9% of the respondents.
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