More Singapore developers looking to hike condo launch prices

by Albert02

More Singapore developers looking to hike condo launch prices

More Singapore developers looking to hike condo launch prices. Homebuyers should brace themselves for higher prices, as 71 percent of developers anticipate moderately or significantly higher unit prices for new launches in the next six months, according to poll results.

Another 24% expect new launch prices to remain the same, while only 5% expect prices to be significantly lower, according to the Q1 2022 survey.

The most recent Real Estate Sentiment Index (RESI) published by the National University of Singapore Real Estate, which represents the university’s Department of Real Estate and Institute of Real Estate and Urban Studies (IREUS).

In the Q4 2021 poll, approximately 60% of respondents expected unit prices of new launches to be moderately or significantly higher, while 35% expected prices to remain the same.

In terms of future launches and sales, approximately 65% of developers polled in the Q1 2022 survey expect moderately more units to be launched in the next 6 months, while 15% expect a moderately lower number.

Meanwhile, rising construction costs have joined rising inflation and interest rates as the top two potential risk factors for nearly 95 percent of senior executives in real estate companies in the next six months.

The proportion of respondents who see a global economic slowdown as a potential risk increased the most from 44.7 percent to 79.5 percent in the previous quarter.

Similarly, approximately 64 percent of respondents identified tightening of debt financing and liquidity as a potential risk, a slight decrease from 65.8 percent in Q4 2021. It was 32.6 percent in the third quarter of 2021.

Government intervention to cool the market has continued to decline, falling from 39.5 percent in the previous quarter to 25.6 percent in the first quarter of 2022. It was 62.8 percent in the third quarter of 2021.

The RESI study’s composite sentiment index, a derived indicator for overall real estate market sentiment, rose from 5.4 in Q4 2021 to 6.1 in Q1 2022 after Singapore reopened its borders and eased Covid-19 safe management measures.

“However, rising inflation could be disruptive as the costs of oil and other raw materials escalate,” said IREUS deputy director Lee Nai Jia, adding that rising interest rates will make mortgage loans and other forms of debt financing more onerous.

“Real estate has frequently been regarded as a good inflation hedge.” The benefits of increased demand are likely to outweigh the drawbacks of government policies and uncertainty.”

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