Singapore Property

OCBC on 18 Sept 2012

URA data yesterday showed a headline total of 1,539 new private residential sales (including 118 EC units) in Aug 12, down 26% MoM over a traditionally lull period of the Hungry Ghosts’ Month of the lunar calendar. Excluding EC and landed-units, sales volume similarly fell 26% MoM to 1,383 units while units launched dipped 38% MoM to 1,047 units. Overall take-up rate, however, remained healthy at 132% (up from 110% previous month). Of note, RCR sales came up 103% MoM to 367 units sold (versus 181 units in Jul 12), partially attributable to a successful launch at One Dusun Residences (153 units out of 154 total units sold at S$1,532 psf). Maintain OVERWEIGHT on residential developers. Top stock picks are City Developments [FV: S$13.18, BUY], CapitaMalls Asia [FV: S$1.85, BUY] and Roxy-Pacific [FV: S$0.54, BUY].

Headline sales down 26% MoM
A headline total of 1,539 new private residential homes (including 118 EC units) were sold in Aug 12 - down 26% MoM. Excluding EC and landed-units, units sold were similarly down 26% MoM but up 3% YoY to 1,383 units. Units launched in Aug 12 dipped 38% MoM to 1,047 units, while the take-up rate increased to 132% from 110% in Jul 12. Total inventory of launched and unsold units in the market fell 5% MoM to 6,536 units.

A lack of major launches
799 OCR residential units were sold, down 44% from 1,427 units in Jul 12, mostly due to a lack of major OCR projects launches over Aug 12. The best selling OCR project during the month was Parc Olympia (launched Jul 12) which sold 110 units at S$870 psf. On the other hand, there was a good pickup in RCR sales - up 103% to 367 units from 181 units in Jul 12 – which can be partially attributed to a successful launch at One Dusun Residences (153 units out of 154 units sold at S$1,532 psf).

Market still looking healthy in Aug 12
Over the month, a traditionally lull period due to the Hungry Ghosts’ Month of the lunar calendar, a low 26% of total sales were attributed to projects newly launched. Because of the boost new launches typically have on sales figures, we judge that the slowdown in headline sales momentum is more likely due to limited new launches than a meaningful slowdown in buyer sentiment. Further more, we note that sales volumes continue to hover above healthy levels above 1k per month, underscoring the impact of a continued highly liquid environment.

Maintain OVERWEIGHT on sector
Maintain OVERWEIGHT on residential developers. Our top stock picks are City Developments [FV: S$13.18, BUY], CapitaMalls Asia [FV: S$1.85, BUY] and Roxy-Pacific [FV: S$0.54, BUY] .