SINGAPORE (Sept 19): Singapore potential private home buyers are staying optimistic despite the economic slowdown, if August private home sales figures are anything to go by. Or are they? And what would the month of Sept bring?

Last month saw the sale of some 1,122 units private home units (excluding ECs), according to the Urban Redevelopment Authority (URA). This was down 4.8% on month, but up 82.1% on year. August also saw the launch of 979 units, up 7.5% on month and up 83.3% on year.

With developers avoiding the launch new projects in the seventh lunar month which ended on Aug 29, the market only saw the launch of Parc Clematis totalling 1,468 units on the last weekend, which became the top-selling project with 316 units sold, says lead analyst Adrian Loh in a Tuesday UOB KayHian report.

Meanwhile, previous launches, such as The Florence Residences, Treasure at Tampines, Parc Botannia and Parc Esta continued to sell down their inventories.

Although Aug sales were up, Loh says this came off a low base last year which was still feeling the effects of the property cooling measures announced last July.

So how would developer sales perform this month?

There were three launches in the Sept 14-15 weekend. This included Meyer Mansion (10.5% sold), The Antares (6.8% sold), and Uptown @ Farrer (12.9% sold).

Loh says the sales are considered “subdued”, compared with the 20% benchmark set after the cooling measures last July.

One other reason could be that the three projects are testing new benchmark psf prices in their vicinity with Meyer Mansion ($2,747psf ASP), The Antares ($1,760psf ASP) and Uptown @ Farrer ($1,800-1900 psf ASP).

Looking ahead, Loh now expects the pace of launches to pick up again, against a more competitive background, given the limited pool of buyers and the ABSD deadline which they will try to beat.

The latest changes to grants and incentives for HDB resale flats by the government could also see stronger demand from HDB owners wanting to upgrade to private homes.

There are still unsold inventories from about 80 new launches between January last year and August that could support overall new sales volume at the expense of lower takeups of individual projects.

At end 2Q19, there was some 39,413 unsold inventory, which is equivalent to 4-5 years of sales, says Loh. Upcoming launches include Midtown Bay (219 units) and Pullman Residences (340 units).

“Based on our channel checks, some of the more aggressive developers are stepping up their game with commissions of 3-4% (vs market norms of c.2%), as well as faster commission payout (eg 1% advance commission within 24 hours of closing a deal),” says Loh.

Sector-wise, UOB KayHian has lowered its rating for stocks of Singapore property developers sector to “market weight” as they are presently trading at “fair” valuations.


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