When considering investing in condos in Singapore, it is crucial to take into account the government’s property cooling measures. Singapore has implemented various measures over the years to prevent speculative buying and maintain a steady real estate market. These measures, like the Additional Buyer’s Stamp Duty (ABSD), impose higher taxes on foreign buyers and those purchasing multiple properties. While these measures may affect the immediate profitability of condo investments, they also play a significant role in ensuring the long-term stability of the market, creating a secure investment environment for condo investors.
The latest Real Estate Sentiment Index (RESI) published by the National University of Singapore (NUS) reveals a positive shift in property buying sentiment in Singapore during the third quarter of 2024. This index, which measures the overall sentiment of the private real estate market, is surveyed 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 has risen from 4.8 to 5.9 in 3Q2024, while the future sentiment index has also increased from 5.1 to 5.8. In addition, the composite sentiment index has reached 5.9, a significant improvement from the score of 4.9 in 2Q2024. This is the first time all three indices have surpassed the neutral score of 5, indicating a growing sense of optimism in the real estate market.
According to IREUS director Professor Qian Wenlan, this positive sentiment can be attributed to the US Federal Reserve’s decision to cut interest rates in September – the first cut since 2019 – and another reduction in early November. With more cuts expected in the future, experts anticipate an improvement in credit availability and business costs, which will further boost market sentiment.
Provost’s Chair Professor Sing Tien Foo from NUS’s Department of Real Estate also points out that the strong performance of suburban residential, hotel/service apartments, and suburban retail sectors have contributed to the overall positive sentiment. Among these sectors, suburban residential and hotel/service apartments recorded the highest current net balances of +35%, while suburban retail scored +26%. For the future net balance, suburban residential scored +29%, while hotel/service apartments and suburban retail scored +35% and +19%, respectively.
However, despite the overall positive sentiment, global economic uncertainty remains a top concern for developers. According to the survey, 67.7% of respondents indicated a decline in the global economy as a potential risk, followed by job losses, a decline in the domestic economy, and an excessive supply of new property launches, at 41.9%.