Local investor sentiment hits 15-month high on back of steady property price decline

Investment property sentiment is finally out of negative territory.

Declining property prices and perceived market stability drove up domestic investor sentiment in the second quarter. According to the Manulife Investor Sentiment Index, aentiment among Singapore investors rose by four points in the second quarter to 15, the highest level since the survey was launched in 1Q13.

The jump was driven primarily by a more positive view of the property, fixed income and mutual fund sectors.
Improved sentiment towards property was the main reason, with sentiment towards primary residence up 10 points to 23 while investment property climbed out of negative territory by 13 points to 5.

“Clearly Singapore investors have recently regained quite a bit of confidence but it’s important not to lose sight of the fundamentals and still take a measured approach. It’s crucial to actively manage a diversified portfolio to guard against risk and maximize returns.” stated Naveed Irshad, President and CEO of Manulife Singapore.

Here’s more from Manulife:
The proportion of respondents who think it is a good time to invest in their own home rose to 40 percent in the second quarter (from 31 percent in the second quarter).

Low interest rates, market stability and, importantly, the view that property prices have corrected to an attractive entry level for investment were key. Private residential property prices fell 1.0 percent in the second quarter of 2014, the third straight quarter of price declines

Of the other asset classes in the index, fixed income (up 4 to 16) and mutual funds (up 2 to 13) also climbed to their highest levels since the survey began. Equities on the other hand showed a small decline (down 3 to 16).

Singapore investors cited market stability and higher returns in fixed income as the main reasons for their increased optimism towards this asset class. There was also increased interest in mutual funds, with low interest rates and the improving employment situation considered key reasons for favoring this type of investment.

The improvement in overall sentiment during the quarter took Singapore above China and Japan, and pulled it even further ahead of Taiwan and Hong Kong. Only in Indonesia, Malaysia and the Philippines are investors more optimistic, the survey showed.
 

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