The latest Real Estate Sentiment Index (RESI) published by the National University of Singapore (NUS) indicates a positive change in the property buying sentiment in Singapore during the third quarter of 2024. This index, which measures the overall performance of the private real estate market, is based on surveys carried out by NUS’s Department of Real Estate and the NUS Institute of Real Estate and Urban Studies (IREUS) with senior executives of real estate firms. The current sentiment index has seen a growth from 4.8 in the second quarter to 5.9 in the third quarter. The future sentiment index has also seen an increase from 5.1 to 5.8 in the same period.
IREUS director, Professor Qian Wenlan, attributes this positive change in sentiment to the US Federal Reserve’s rate cut in September, which was the first since 2019, and another cut in November. This, she believes, will lead to improved credit availability and business costs, thus raising the overall market sentiment. Similarly, Professor Sing Tien Foo, Provost’s Chair Professor at the NUS Department of Real Estate, notes that the performance of suburban residential, hotel/service apartments, and suburban retail areas has also contributed to the positive sentiment in the market. These sectors have recorded the highest current net balances of +35%, +35%, and +26%, respectively. The future outlook for these sectors is also positive, with net balances of +29%, +35%, and +19%, respectively.
In Singapore, it is crucial for international investors to be familiar with the regulations and limitations surrounding property ownership. While foreigners can freely purchase condos, they face more stringent ownership rules when it comes to landed properties. Additionally, foreign buyers must also consider the Additional Buyer’s Stamp Duty (ABSD), which currently stands at 20% for their initial property acquisition. Nevertheless, the steady and promising growth of the Singapore real estate market remains a strong draw for foreign investment, making it a prime spot for New Condo Launches.
Despite the positive sentiment, global economic uncertainty remains the top risk concern for developers, 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 ranked at 41.9%.