Property Market Sentiment Improves 3Q2024 Boosted Interest Rate Cuts Nus
The latest Real Estate Sentiment Index (RESI) released by the National University of Singapore (NUS) suggests that sentiment towards property buying in Singapore has taken a positive turn in the third quarter of 2024. The RESI, which measures the general market sentiment by surveying senior executives of real estate firms, is published quarterly by the NUS Department of Real Estate and the NUS Institute of Real Estate and Urban Studies (IREUS).
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The current sentiment index has risen from 4.8 in the second quarter to 5.9 in the third quarter, while the future sentiment index has also seen an increase from 5.1 to 5.8 in the same period.
Additionally, the composite sentiment index has shown a growth to 5.9 from 4.9 in the previous 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 attributes this positive sentiment to the recent US Federal Reserve rate cut in September, the first since 2019, and another reduction in early November. She believes that with more rate cuts expected in the future, it will lead to improved credit availability and lower business costs, which will in turn boost market sentiment.
Professor Sing Tien Foo, Provost’s Chair Professor at the NUS Department of Real Estate, has also observed that the performance of the suburban residential, hotel/service apartments, and suburban retail sectors has contributed to the overall positive market sentiment.
The current net balances for suburban residential and hotel/serviced apartments were the highest at +35%, followed by suburban retail at +26%. The outlook for these sectors also looks promising, with suburban residential scoring +29% for future net balance, and hotel/serviced apartments and suburban retail scoring +35% and +19% respectively.
However, Professor Sing notes that global economic uncertainty is still a major concern for developers, with 67.7% of respondents listing 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%.
