Property Development & Inventory - CGS-CIMB Research 2021-01-15: Strong End To 2020

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 - Strong End To 2020




New launch boosts Dec 20 sales

  • Dec 2020 private new home sales saw a 130% y-o-y (+54% m-o-m) surge to 1,265 units, boosted by the launch of UOL’s The Clavon, which accounted for 37% of Dec’s sales. Excluding Executive Condominiums (ECs), monthly sales also saw a 126% y-o-y (+57% m-o-m) jump to 1,217 units.
  • Other projects that continue to do well include Ki Residences at Brookvale and Parc Clematis. Outside Central Region (OCR) projects made up 76% of total ex-EC take-up for the month while suburban projects accounted for another 19%.


Expect volume demand to remain stable in 2021

  • 2020 primary sales totaled 10,320 units, a marginal 3.2% decline over 2019 volume, commendable in light of the COVID-19 pandemic. Meanwhile, according to Singapore Real Estate Exchange (SRX), the non-landed resale market saw 1,236 units changing hands in Dec 2020 (-5% m-o-m, +79.4% y-o-y), led by active transaction volumes in the Outside Central Region. This brings 2020 resale transactions to 10,712, or 18.1% higher y-o-y.
  • We believe demand was underpinned by the low interest rate environment and a measure of pent-up demand. We expect volume demand to remain stable in 2021F, at between 9,000-10,000 units.


Forecast a 0-5% hike in private home prices in 2021

  • Private home prices increased 0.1% for 9M20 vs. end-2019 levels and we anticipate a further uptick in 4Q20. We expect private home prices to rise by a slightly better 0-5% for 2021F, thanks to robust demand.
  • Overall, we expect prices to pace economic recovery as developers continue to price their projects competitively in order to move inventory.

Reiterate sector Overweight






LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2021-01-15
SGX Stock Analyst Report ADD MAINTAIN ADD 10.100 SAME 10.100
ADD MAINTAIN ADD 3.420 SAME 3.420
ADD MAINTAIN ADD 7.600 SAME 7.600



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