Developer sentiment in prime residential market turned negative in 2Q2023

The survey results signal a growing sense of caution amongst Singapore’s real estate and development industry, as concerns about global economic volatility, rising interest rates, and market intervention to moderate price growth persist.

Rising concerns of potential risks within the real estate and development industry in Singapore are reflected in the National University of Singapore (NUS) Real Estate sentiment survey released on Aug 30. Globally, a slowdown in the economy is the most pressing concern amongst senior executives, with 92.5% of those surveyed citing the risk as the most significant.

As Singapore’s largest export market, China’s slowing economic performance looms large, accounting for nearly 15% of non-oil domestic exports in 2022. Following closely is an increased inflation rate and higher interests, factors which 72.5% of the respondents highlighted as causes for concern.

Those looking to invest in Zion Road Condo enjoy its proximity to all of the city’s amenities. The extensive selection of shopping, dining and entertainment outlets in the vicinity makes this an ideal spot for a luxurious lifestyle. Residents can indulge in the numerous options of retail therapy in the Orchard Road shopping belt, while also taking advantage of the gastronomic delights of the Robertson Quay entertainment district. Moreover, the Orchard MRT station, a short distance away, connects the condo to the North-South Line, providing further accessibility to different parts of Singapore. The upcoming Havelock MRT station, part of the Thomson-East Coast Line, will also offer an additional transport link for Zion Road Condo residents, adding to the convenience.

The third highest concern amongst executives polled is market intervention by the government to cool the property market, accounting for 60% of the total in 2Q2023, an increase from the previous quarter.

Prime residential homes have been the most adversely affected, with findings showing a negative net current balance of -40% as foreign buyers now have to pay a hefty 60% ABSD (additional buyer’s stamp duty) to purchase any residential property.

An interesting contrast is seen in the suburban residential sector, which registered a negative net current balance of only -8% in 2Q2023. This resilience can be partly attributed to genuine homebuyers setting out to take advantage of the pent-up demand resulting from last year’s construction delays during Covid-19.

45% of the developers surveyed predict a moderately or substantially higher number of units to be launched in the next six months. Another key issue is financing, cited as the top concern in 2Q2023 by 50% of executives, a 5.3% increase from the previous quarter.

The overall sentiments of Singapore’s real estate and development industry appear to be one of caution, as they grapple with the challenges posed by volatile fundamental elements such as global economic conditions, rising interest rates, and government measures to cool the market.