Property Development & Inventory - CGS-CIMB Research 2020-06-15: Slight Recovery In May20 Primary Home Sales

Property Development & Inventory - CGS-CIMB Research | SGinvestors.io CITY DEVELOPMENTS LIMITED (SGX:C09) CAPITALAND LIMITED (SGX:C31) UOL GROUP LIMITED (SGX:U14)

Property Development & Inventory - Slight Recovery In May20 Primary Home Sales




May home sales came in at 486 units

  • According to the Urban Redevelopment Authority, primary home sales for May 2020 came in at 509 units, or 486 units excluding Executive Condominiums (ECs). Although the May sales volume was down 49% y-o-y, it was an encouraging 75.4% increase on a m-o-m basis during the circuit breaker in May.
  • The best-selling projects were Treasure at Tampines, Parc Clematis, Parc Esta and Florence Residences. Outside Central Region (OCR) sales made up the largest proportion (53%) of monthly sales in May.


Slower near-term demand expected, in our view

  • For 5M20, primary sales totaled 3,019 units, -16.9% y-o-y. 5M20 sales made up 34-38% and are tracking closer to the lower-end of our 2020F transaction volume projections of 8,000-9,000 units. However, according to real estate portal SRX Property data, resale transaction volumes from Jan-May 2020 were estimated at 2,600 units, down 27.2% y-o-y, dragged by weak Apr and May resale volumes, as physical viewing of properties were not allowed during the circuit breaker period.


Price upside limited by ample supply and weaker sentiment

  • We expect private home prices to moderate by up to -5% for 2020F. A total of 38 new projects with c.13,000-14,000 new units are scheduled to be launched in 2020F. In the near term, slower market sentiment and ample supply would mean that developers would likely have to price their projects competitively to continue to move inventory.


Maintain sector Overweight






LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2020-06-15
SGX Stock Analyst Report ADD MAINTAIN ADD 10.230 SAME 10.230
ADD MAINTAIN ADD 3.520 SAME 3.520
ADD MAINTAIN ADD 7.250 SAME 7.250



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