Property developers remain cautious, survey shows

Property developers remained cautious in the fourth quarter of last year, according to The Real Estate Sentiment Index (RESI) Survey released on Tuesday.

An indicator for overall real estate market sentiment, the composite sentiment index, increased to 4.0 from 3.9 in the previous quarter.

A score under five signals deteriorating market conditions and one above five means improving conditions.

The current sentiment index increased to 4.1 from 3.9, while the future sentiment index increased to 4.0 from 3.9.

The RESI is developed by Real Estate Developers' Association of Singapore (Redas) and the Department of Real Estate at the National University of Singapore (NUS).

Senior executives of Redas member firms answer the quarterly questionnaire.

The survey also showed that prime and suburban residential sectors were the worst performing sectors in the quarter.

Looking at residential property, 39 per cent of developers expect residential property launches to maintain, and 62 per cent expect unit prices to drop in the next two quarters.

Many developers, about half, were concerned about higher land cost.

Another finding showed that 72 per cent thought that capping the mortgage servicing ratio to 30 per cent of a borrower's gross monthly income made a significant dent on the demand for executive condominiums.