Property drives investor sentiment to 18-month high

Increased optimism about the property sector has sent investor sentiment here to an 18-month high in the second quarter, according to a new survey. -- PHOTO: AFP
Increased optimism about the property sector has sent investor sentiment here to an 18-month high in the second quarter, according to a new survey. -- PHOTO: AFP

Increased optimism about the property sector sent investor sentiment here to an 18-month high in the second quarter, according to a new survey.

It also found that local investors were more optimistic than many of their counterparts across Asia.

Real estate is underpinning the better mood in Singapore with 40 per cent of respondents thinking it is a good time to invest in their own home, up from 31 per cent in the first quarter.

This was likely due to "low interest rates, market stability and, importantly, the view that property prices have corrected to an attractive entry level for investment", said insurer Manulife, which conducted the survey. Prices of private homes have fallen 3.2 per cent from their peak in September last year to the end of June this year, according to official figures last month.

Interest rates have also remained low in recent months with the three-month Singapore Interbank Offered Rate (Sibor) hovering around 0.4 per cent.

The "improved sentiment towards property" was the main reason overall investor sentiment climbed in the three months to June 30 to its highest level since January last year, Manulife said yesterday.

Singapore investors are now more cheerful overall than their peers in mainland China, Japan, Taiwan and Hong Kong.

Only in Indonesia, Malaysia and the Philippines were investors more optimistic, Manulife said.

"Clearly, Singapore investors have recently regained quite a bit of confidence but... it's crucial to actively manage a diversified portfolio to guard against risk and maximise returns," said Mr Naveed Irshad, president and chief executive of Manulife Singapore. Investors here also grew more upbeat about bonds but were less keen on equities as at the end of June.

The greater interest in bonds was due to "a flight to quality amid uncertainty arising from the situation in Ukraine and geopolitical tension elsewhere", said Ms Jill Smith, senior managing director of Manulife Asset Management (Singapore).

Ms Smith said that although stocks seem to have lost their shine for now, their appeal may rise again: "We are optimistic about equities in developed Asian markets... In Singapore, listed companies should continue to benefit from increased economic activity overseas."

Manulife's survey in Singapore was done through 500 online interviews of middle-income to affluent investors who were at least 25 years old and owned investment products.

melissat@sph.com.sg