As the global economic landscape shows signs of strain, the property market sentiment index has sharply declined, falling from 6.0 in the fourth quarter of 2024 to 4.3 in the first quarter of 2025. This notable decrease marks the end of a five-quarter upward trend and signals a growing concern among real estate professionals about the current economic environment.
The decline in sentiment has been attributed primarily to perceptions surrounding the global economic slowdown. A staggering 88% of real estate executives now identify this slowdown as a top risk, a significant increase from 70.4% in the previous quarter. The sentiment shift reflects a growing unease as industry leaders grapple with the implications of a faltering global economy on property markets.
The heightened concern has led to a pervasive sense of uncertainty, which has inevitably impacted investment decisions and market activities.
Furthermore, the outlook for industrial and logistics properties has taken a considerable downturn. Positive sentiment in this sector plummeted from 11% to a stark -25%. This sharp decline indicates that industry players are increasingly pessimistic about the future performance of logistics and industrial assets, which are often viewed as bellwethers for economic health.
The drop in confidence in these sectors illustrates how interconnected the property market is with broader economic conditions, as demand for industrial space is often tied to consumer spending and manufacturing activity.
In addition to the bleak outlook for industrial properties, the office sector also experienced a deterioration in sentiment. The negative outlook for office spaces worsened from 7% to 25%, reflecting increasing doubts about the future of workspaces in an era where remote and hybrid work models are becoming more commonplace.
Industry professionals are reevaluating the long-term viability of office properties, as the shift in workplace dynamics poses challenges to traditional leasing models and occupancy rates.
The response to tariffs has further exacerbated the situation, with fears regarding their economic impact surging dramatically from 29.6% to 70.8% among industry professionals. The implications of tariffs on construction costs, supply chains, and overall economic activity have raised alarms, leading to reduced confidence in the property market.
Executives are now more wary of the potential disruptions that tariffs may bring, which could stifle growth and investment in various property sectors.
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News Source: Edgeprop
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