Everyone's devastated by the sudden crash in March.
According to PropNex Realty, private home sales slowed more than 33% in March after picking up last month, given the cautious mood and overall fewer new launches.
Developer sales remain fairly muted in the month of March with a total of 724 units launched and 480 units sold (excluding ECs); and only one new residential project— The Santorini, entered the market last month.
The tight supply situation is a result of developers adopting a deliberate stance to time their launches and possibly adjust their pricing strategy appropriately before putting their product on the market.
Including ECs, developers found buyers for 535 homes, which also reflected a fall of 30% from the previous month’s figure of 769 units.
Singapore Business Review compiled outlooks from analysts to see if April bodes well for home sales.
Alice Tan, Head of Research, Knight Frank Singapore:
We expect new sales volume in April 2014 to improve, on the back of more new launches and fairly positive market interest to date. Lakeville, launched in first weekend of April, was a success with all units released in the first phase sold. Sky Habitat will be re-launching at lower prices this weekend starting at $1,370 per sq ft, and it is likely to be very well received, given its good location in Bishan and near the Bishan MRT station.
These two projects are expected to support new sales performance in the OCR and RCR.
Apart from these 2 projects, several other projects are also conducting re-launches for example Alex Residences and The Skywoods. This will bring some prominence to these projects which were first launched some months ago.
The rate of sales in the CCR is expected to remain muted, with modest volume of new sales supporting the clearance of existing unsold units in the region. New sales volume is expected to be between 50 and 70 units in April. There are no new major launches in the CCR expected in April.
Moving forward, several highly-anticipated mid- to large-scale projects by established developers will also be launching in second quarter or beyond: Waterfront @ Faber in Clementi by World Class Land, Commonwealth Towers by CDL and Hong Leong Group, CoCo Palms by CDL, Highline Residences at Kim Tian Road by Keppel Land, and, and Marina One Residences by M+S.
With the TDSR in place, local buyers are increasingly price quantum sensitive, and it is important for developers to price their projects optimally, particularly big projects, in order to achieve strong sales.
Second quarter new sales volume is expected to improve from the first quarter, to between 2,200 and 2,500 units, as market interest gradually return with anticipation of developers’ attractive offerings for their new launches.
Tricia Song, analyst, Barclays:
We believe projects that are located within 100-200m of MRT stations and in areas not already saturated with previous supply will still remain more popular. The Straits Times reported on 15 April that 1,500 people flocked to the first-day preview (13 April) of Commonwealth Towers next to Queenstown MRT station.
This is a 43-storey condominium on Commonwealth Avenue. It is set to launch in 1 May, with completion by late 2017. With full condo facilities, this 99-year leasehold project will offer 845 units of 1-4BR apartments ranging in size from 441sqft for a 1BR to a 1,302sqft 4BR.
Buyers can choose from units offering a variety of views such as the city and Southern Ridges. The project will be jointly developed by members of the Hong Leong Group – Hong Leong Holdings, City Developments Limited (30% stake; CIT SP; UW; PT S$9.08) and Hong Realty.
The land was purchased via the Government Land Sale tender in Feb 2013 at S$883psf per plot ratio. We estimate breakeven at S$1,395psf and a selling price of S$1,600psf. We expect if the developer were to price it below this level, interest could be better than expected. Projects in that location – namely Queens and Alexis – have been transacting at S$1,358psf and S$1,839psf, respectively over the past year, while projects around Redhill MRT station (a station nearer to town) saw transactions of S$1,323-1,729psf.
Chia Siew Chuin, Director of Research & Advisory, Colliers International:
With developers focusing on moving units in previously launched projects, there were only two new projects launched in March. They are the 597-unit The Santorini located in the Outside Central Region (OCR) and the 28-unit Ascent@456 located in the Rest of Central Region (RCR), both of which were fully launched. Developers did not launch any new projects in the Core Central Region (CCR).
Overall, the units launched in the CCR, RCR and OCR respectively took up 1.5%. 11.9% and 86.6% of islandwide new launches of 724 units (excluding ECs).
The increase in new homes sales in both the CCR and RCR failed to mitigate the fall in project sales in the OCR, leading to a decline in the overall sales volume islandwide.
The number of new homes sold in the OCR was halved to 299 units in March. Although the fully-launched The Santorini sold only 76 units, the project still come in top in terms of sales tally amid a slow market with few project launches. Homebuyers picked up the remaining 223 units from previously launched projects such as Rivertrees Residences, The Glades and Urban Vista.
Sales in the RCR and CCR improved 44.3% and 1.9%, respectively. The improvement in sales volume was due to homebuyers picking up units from previously launched projects. These include Eight Riversuites (44 units sold), Guillemard Suites (14 units sold), and Bartley Ridge (12 units sold) in the RCR, as well as Hallmark Residences (13 units sold), Liv on Wilkie (9 units sold) and Goodwood Residences (8 units sold) in the CCR.
Units sold in the CCR, RCR and OCR constituted 11.3%, 26.5% and 62.3%, respectively, of islandwide new sales of private homes in March 2014.
Now that the TDSR has been in play for nine months, the dust has somewhat settled and buying volume is likely to improve in tandem with the anticipated launch of attractive and well-located residential projects.
Nonetheless, there appears to be little respite for the private residential property market at least in the short term. This is in view of the continued enforcement of the cooling measures, the tentative recovery of the global economy, as well as longstanding concerns of potential interest rate increases and a mounting supply of homes. In light of various headwinds, the theme of affordability will persist and homebuyers are expected to remain highly selective in their purchases.
Taking into consideration the healthy interest seen during the launch of Lakeville in early April, primary market sales volume is expected to climb to the region of 500-800 units in April before improving further in the following months.
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