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The latest Real Estate Sentiment Index (RESI) published by the National University of Singapore (NUS) shows a positive shift in property buying sentiment in Singapore during 3Q2024. The RESI measures the overall sentiment of the private real estate market by surveying senior executives of real estate firms, and is conducted quarterly by NUS’s Department of Real Estate and the NUS Institute of Real Estate and Urban Studies (IREUS).
Compared to the previous quarter, the current sentiment index grew from 4.8 to 5.9 in 3Q2024, while the future sentiment index also increased from 5.1 to 5.8 during the same period. Additionally, the composite sentiment index rose from 4.9 to 5.9, marking the first time that all three indices have surpassed the neutral score of 5. This rise in sentiment can be attributed to growing optimism in the overall market, according to IREUS.
IREUS Director Professor Qian Wenlan attributes the positive sentiment to the US Federal Reserve’s decision to cut interest rates in September, the first cut since 2019, with another reduction taking place in early November. This is expected to improve credit availability and reduce the costs of doing business, subsequently boosting market sentiment.
Professor Sing Tien Foo, Provost’s Chair Professor at the NUS Department of Real Estate, also notes that the positive performance of suburban residential, hotel/service apartments, and suburban retail sectors has contributed to the general market sentiment. These areas recorded the highest current net balances of +35%, +26%, and +19% respectively, while their future net balances were also positive at +29%, +35%, and +19%.
While the outlook for the market seems promising, Prof Sing highlights that the top risk concern of developers is still global economic uncertainty, with 67.7% of respondents citing a potential decline in the global economy. This is followed by concerns about job losses (41.9%), a decline in the domestic economy (41.9%), and an excessive supply of new property launches (41.9%).