PROPERTY market sentiment improved slightly in the second quarter, but the mood was still dampened by the uncertainty over the euro zone debt crisis.
The Redas-NUS real estate composite sentiment index for April to June inched up to 4.7, from 4.6 in the first quarter.
It had declined for four straight quarters last year to plumb a nadir of 3.3 in the fourth quarter of last year.
A score below five indicates deteriorating market conditions while a score above five reflects improving market conditions.
Redas chief executive Lee Suan Hiang said developers and industry players were "cautiously optimistic" about market sentiment over the second half of the year.
He said it was "encouraging to see the continued resilience and strong performance of the hotel sector over the last few quarters".
The hotel sector continues to garner forward momentum with a net balance of 33 per cent of industry players surveyed saying they were optimistic about its current state, Redas and the National University of Singapore (NUS) said in a joint statement yesterday.
In contrast, the office sector is struggling owing to uncertainty over the global economic outlook, with a net balance of 31 per cent of respondents saying they were pessimistic about how it was currently faring.
A net balance figure is the difference between the proportion of respondents who were optimistic and the proportion who were pessimistic.
Fewer private residential units are expected to come onto the market in the coming months. Of the developers surveyed, 46 per cent expected more units to be launched soon, a sharp decline from 77 per cent in the first quarter of the year.
More of them than before also think prices will hold at current levels over the next half year.
"The uncertainty arising from the European sovereign debt crisis instils some degree of risk aversion in developers and buyers," said NUS real estate associate professor Sing Tien Foo.
"Some developers are adopting the 'wait and see' approach by moderating down new launches to the market."
The composite index, developed by the Real Estate Developers' Association of Singapore (Redas) and NUS' Department of Real Estate, combines two indices - the current sentiment index and the future sentiment index.
The current sentiment index, in which real estate industry players rate market conditions now compared with six months ago, stood at 4.9 for the second quarter, up from 4.8 in the first.
The future sentiment index, which indicates industry players' market outlook over the next six months, also moved up marginally from 4.4 in the first quarter to 4.5 in the second quarter.