WHAT’S NEW
- The Urban Redevelopment Authority’s (URA) monthly developer sales for January indicate 565 units (+118% mom, -72% yoy) were sold (excluding executive condominiums (EC)) vs a launch of 549 units (+365% mom, -70% yoy). Monthly sales were the slowest for the month of January since 2009. Including ECs, 610 units were sold.
ACTION
- We believe the market has over-discounted the negative prospects for the residential sector, pricing in a 40-50% fall in property prices. We expect property prices to undergo a healthy 5-10% correction in 2014. We prefer deep value and diversified developers. CapitaLand, Keppel Land, Ho Bee and Wing Tai are our preferred picks.
ESSENTIALS
- Slower new launches continued to impact home sales, with some seasonal impact from
Chinese New Year at end-January. The best-selling project in the month, The Hillford, was fully sold (281 units, S$1,105psf) due to smaller unit sizes and lower absolute quantums for the 60-year leasehold project targeting retirees. Other new launches included The Panorama (58 units sold, S$1,343psf) by Wheelock Properties at Ang Mo Kio, and freehold Floraview (1 unit sold, S$1,396psf) by Oxley at Yio Chu Kang. Buying interest remained selectively driven by new launches with the two bestselling new launches accounting for 60% of total sales in January.
- Developers selectively discounting projects with median unit prices at The Glades by Keppel Land at S$1,385psf, down 6.2% mom from S$1,477psf in Dec 13 and 8.8% off from launch price of S$1,518psf in Sep 13. According to reports, Keppel Land has been offering discounts of S$48,000-88,000 since Dec 13, and has also offered additional discounts of S$4,800-16,800 during Chinese New Year.
- Anticipate monthly volumes to improve in February with 1,000 new homes to launch in Sengkang including Riverbank @ Fernvale (>200 units of 555 units sold, S$1,000psf) and Rivertrees Residences (495 units, S$950-1,150 psf).
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