A poll showed that 71 percent of developers expect transacted prices of new development in the next six months to stay moderately or significantly higher. This is bad news for people who want to buy a home.
The Q1 2022 survey indicate that the other 24% think the prices of new products will stay the same, while only 5% think prices will go down by a large amount.
In the Q4 2021 poll, about 60% of respondents thought that the unit prices of new launches would go up a little or a lot, while 35% thought that the prices would stay the same.
About 65% of developers polled in the Q1 2022 survey think that moderately more units will be launched and sold in the next 6 months, while about 15% think that moderately less units will be launched and sold.
Nearly 95% of management in real estate industry say that rising inflation and interest rates, along with rising construction costs, are the top two risks for the next six months.
The number of people who said a slowdown in the global economy was a possible risk went from 44.7 percent to 79.5 percent, which was the biggest jump from the last quarter.
In the same way, about 64% of respondents pointed to a tightening of liquidity in the debt market as a possible risk, which is a slight drop from Q4 2021, when 65.8% did so. In the third quarter of 2021, it was 32.6%.
As a possible risk factor, government intervention to cool the market kept going down, going from 39.5% in the previous quarter to 25.6% in Q1 2022. It was 62.8% in the third quarter of 2021.
The RESI study’s composite sentiment index, which is an indicator of how people feel about the real estate market as a whole, went up from 5.4 in Q4 2021 up to 6.1 in Q1 2022 after Singapore opened its borders and further reduced Covid-19 safe management measures.
“However, rising inflation could be troublesome if the prices of oil and other materials keep going up,” said IREUS deputy director Lee Nai Jia. He also said that rising interest rates will make mortgage loans and other forms of debt funding harder to get.
“Real estate has often been seen as a good way to protect yourself from inflation. The good effects of more demand are likely to outweigh the bad effects of government actions and uncertainty.”