• 
• 

Rising cost of construction material, cost-push inflation and the present political upheavals are major reasons for the gloom. The looming shortage of the construction labour force is another factor that developers of real-estate projects must consider seriously.

During the first two months of the year, most developers, home-builders, brokers and lenders reported better business figures compared to the same period last year. The stimulus measures unveiled by the Finance Ministry in early March lifted confidence levels, as proven by the above-par 55.5 mark registered in the second quarter survey of the REIC Housing Developers Sentiment Index. Listed companies were much more bullish than the non-listed ones, and the breakdown showed that operating costs were expected to be the weakest link. For the longer term, the index fared even better, registering a figure of 68.3.

The second quarter came with an influx of real-estate activity, which had been held back till the tax incentives came into effect.

Then, the aggravation of oil prices, inflation shock and the intensified political battles set in.

The latest survey revealed a major downshift in developers' confidence. The index compiled at the end of last month confirmed a sharp drop in developers' sentiment to 45.

However, the stimulus package should be a powerful positive. The subsequent six months will be filled with major housing fairs, almost on a monthly basis, to lure buyers. There should be a wave of buyers rushing in to beat the stimulus deadline (March 28 next year), while sellers will try to settle things by year-end to shore up their balance sheets.