Singapore Residential Property

OCBC on 17 Apr 2012

URA data yesterday showed 3,032 new private residential homes (including 639 EC units) sold in Mar 2012. Excluding EC and landed-units, new home sales were mostly flat MoM and up 76% YoY to 2,363 units - keeping up the rapid pace from Feb 2012. The take-up rate continued to be healthy at 94%, coming down somewhat from 110% last month. We continue to witness broad-based buyer demand across the market underpinned by ample liquidity and buoyant buyer sentiment, but remain cautious of additional curbs given the rapid sales pickup after ABSD measures only in Dec 2011. Moreover, we continue to be wary of potential macro-economic headwinds going forward given residual uncertainty in Europe. We maintain a NEUTRAL stance on residential developers. Our top property picks are CMA [FV: S$1.79, BUY] and CAPL [FV: S$3.40, BUY]. We have a SELL rating on CDL [FV: S$8.92].

Momentum carries into Mar 2012
A headline total of 3,032 new private residential homes (including 639 EC units) were sold in Mar 2012. Excluding EC and landed-units, units sold were mostly flat MoM (-1%) and up 76% YoY to 2,363 units - keeping up the rapid pace of sales from Feb 2012. The take-up rate continued to be healthy at 94%, coming down somewhat from 110% last month.

Still a mass-market and mid-tier story
Sales in the mass-market segment (OCR) kept up its momentum for a third month with 1,798 units sold (1,801 in Feb 12). Mid-tier segment sales (RCR) were maintained at 510 units in Mar 12 (524 units sold in Feb 12). A new OCR launch at Ripple Bay (Pasir Ris) put in a solid performance with 369 units sold (out of 728 total units). We also saw healthy sales in previously launched projects such as The Minton and Riverside Residences with ~100 units sold each.

Buyer sentiments further consolidate
We continue to witness broad-based buyer demand across the market underpinned by ample liquidity and buoyant buyer sentiment. In our view, buyers sidelined by the Dec 2011 ABSB curbs likely re-entered the market after witnessing the strong bounce in new home sales over Jan-Feb 12. With ample liquidity and strong HDB resale prices, we expect healthy sales momentum in 1H12, barring additional policy curbs.

Cautious of additional property curbs
Given the torrid sales momentum after ABSD measures only in Dec 2011, we remain cautious of additional property curbs. Moreover, we continue to be wary of possible macro-economic headwinds going forward given residual uncertainty in Europe. Maintain NEUTRAL on residential developers. Our top property picks are CapitaMalls Asia [FV: S$1.79, BUY] and CapitaLand [FV: S$3.40, BUY]. We have a SELL rating on City Developments [FV: S$8.92, SELL].