RHB Research 2015-07-16: The Real Estate Pulsebeat: June 2015 homes sales – Lowest Home Sales For The Year!

Singapore Real Estate

  • New home sales (excl. ECs) for Jun 15 were soft as sales figure arrived at 638, representing a decline of 22.2%/41.2% YoY/MoM vis-a-vis 638 units in May 15, 1,124 units in Apr 15 and 613 units in Mar 15. 
  • The poor sales figure were mainly attributed to a lack of new project launches, as developers are reluctant to launch their projects in this depressed market. 
  • We think that home sales figure should improve next month as the market launches new projects such as High Park Residences by Chip Eng Seng and Brownstone EC by CDL. 
  • Despite talks that the property market would do well after the election, we expect the property scene to remain quiet for the remaining 2015. 
  • We project the ASP for residential property to drop 6-10% per annum in 2015 (URA PPI is down 4.0% in 2014). 
  • Top pick is regionally diversified CAPL (BUY, TP: SGD4.20). 

 Top-selling project led by an existing project. 

  • Botanique At Bartley by UOL Group has achieved 50.6% of its units sold as buyers purchased additional 56 units – locking in a median selling price of SGD1,301 psf. 
  • As we highlighted last month, private condo sales are expected to decline this month as there were no new condo launches in Jun. 
  • Other projects that did relatively better are Lakeville by Lakeville and The Panorama by Wheelock which sold additional 25 units respectively. 
  • Other notable projects which clocked in modest sales namely are North Park Residences (24 units sold), City Gate (23 units), West Wood Residences (19 units) and Bellewoods (15 units) etc. 

 New home sales in Jun 15 will do better. 

  • Despite the sluggish home sales figure this month, we are expecting to see more home buyers in Jul, solely driven by new project launches. In the month of July, New projects such as High Park Residences by Chip Eng Seng which yields a total of 1,399 units. 
  • Given that home buyers are more price sensitive these days, we expect sales at the High Park Residences to do well as we estimate over 70% of the projects would be priced below a million dollars. 
  • In addition, Brownstone EC by CDL would also be launched in June which had also drew strong interest from the market. 

 Lifeless property market to continue into 2015. 

  • We think the lifeless property market seen last year is likely to persist into 2015. 
  • We project new homes sales (incl. ECs) to hit 6,000-9,000 units and ECs to hit below 2,000 units. 
  • Property prices are forecasted to drop 6-10% per annum in 2015; It has insofar dropped 3.9% YoY as of 1Q15. 
  • We are still most downbeat on the CCR (high-end) segment, followed by RCR (mid-tier) and we expect the mass-market segment to stay most resilient this year. 
  • So long that the resident unemployment rate stays low (1Q15: 1.8%), we do not expect drastic property fire sale in this segment of the market. 

(Ong Kian Lin, Ivan Looi)

Source: http://www.rhbgroup.com/