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News Release

Jones Lang LaSalle’s Perspective: Urban Redevelopment Authority Private Residential Property Transactions for January 2012


SINGAPORE,15 February2012 – The URA monthly sales volume for private residential units (excluding executive condominiums (ECs)) increased by 196% m-o-m in January 2012 to 1,872 units as several large developments were launched in the mass markets attracting buyers. This represents the highest January sales total since the series started in June 2007. New launches Watertown and The Hillier combined accounted for 70% of new launches in the month, and 62% of all sales transactions, although excluding these developments, sales volume still increased by 13% m-o-m as residual demand for mass market projects remained. Overall, the take-up rate in January 2012 reached 85%, up from the 67% in December 2011.  
 
Table 1: Total island-wide (landed & non-landed excluding ECs) units sold

Jan-11

Dec-11

Jan-12

m-o-m change

y-o-y change

CCR

202

35

17

-51%

-92%

OCR

599

489

1,761

260%

194%

RCR

409

108

94

-13%

-77%

Island-wide

1,210

632

1,872

196%

55%

Take-up Rate

97%

67%

85%

 

 

The Outside Central Region (OCR) provided the bulk of new supply across the island this month as some 1,975 units were launched, some 90% of the overall new supply in January. Of this, 77% (or 1,520 units) were delivered at two schemes – Watertown, where 992 units were launched, and The Hillier, where 528 units were launched. Outside of this, further large launches included Parc Rosewood, where 236 units were launched and Riversound Residence which provided an additional 200 units. Sales activity remains strong in the OCR, with the take-up rate reaching 89% this month as residual demand remains. Overall 66% of sales in the OCR were at Watertown and The Hiller, where take-up reached 78% and 73% respectively. Even without these two large developments, 604 units were sold in the OCR in January, an increase of 24% on the December total.

Outside of the OCR activity remained muted. There were no new launches in the Core Central Region (CCR) as previously launched developments continue to have units available for sale, and sales activity fell by 51% m-o-m to just 17 units as demand for prime properties dwindled.

In the Rest of Central Region (RCR), 224 units were launched in January, with key projects including the newly launched Centra Residences, where all 78 units came to the market, and 71 units at Idyllic Suites. Take-up however was weak, with only 17% and 4% of units sold at each development respectively and 94 units across the region in total. In the RCR overall, the take-up rate reached 42%, significantly down on the 81% in December 2011.

Following the measures introduced by the government in December 2011, we have revisited our analysis of the policy impact in the first 30 days following its introduction.

Table 2: Weighted Sales Volume of Transactions Pre and Post Policy

Date of state intervention

Weighted sales volume

Change

Preceding 30 days

Following 30 days

1st set (15 Sep 09):

1,445

966

-33%

2nd set (20 Feb 10):

1,337

1,593

19%

3rd set (30 Aug 10):

1,218

921

-24%

4th set (14 Jan 11):

1,233

1,170

-5%

5th Set (7 Dec 11)

1,448

852

-41%

 
As can be seen, the latest measures have had a significant impact on sales activity, with the weighted sales volume for the first 30 days following the policy dropping by 41%, the largest falls we have seen following any policy event, indicating that they had a significant impact on sales activity since they were introduced in December 2011.
 
However, further analysis of January’s sales data highlights the existing residual demand, especially for mass market projects, as Singaporean buyers continue to purchase new homes as they are launched. While the addition of Watertown and The Hillier have inflated the numbers this month, if we exclude them from the totals we can see that demand remains strong for mass market projects. While the overall take-up rate for the market is 85% in January 2012, excluding these developments this jumps to 105%, highlighting the underlying strength of demand in the mass market without the addition of these exceptionally large projects. The same is also true of the overall take-up, with the number of units sold in the OCR up 24% m-o-m if we exclude these developments.
 
“We maintain our view that the underlying Singaporean buyers’ demand market is likely to continue to support the mass market in 2012. With some developers’ absorbing part of the additional stamp duty, this has effectively mitigated the impact of the recent government policy. Excluding these two large launches, the number of units sold in January is 715, if the situation remains stable, some 11,500 – 12,000 units could be sold by end 2012” reckons Dr Chua.
 
In light of the strong demand for mass market homes, the HDB released this morning, some four parcels in Punggol and Sengkang that could yield some 2,070 housing units. The demand for executive condominiums has been strong, especially those in Punggol such as Prive and Riverparc Residence which have been completely sold. “Moving forward, we can expect some downside bias given the risk from the looming Euro-zone sovereign debt crisis.
 
Developers are likely to be more conservative with the bids for any government sites. For these executive condo parcels in Punggol, the bid prices could range between $300-$380 psf”, Dr Chua added.  
 
 
 
About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.7 billion of assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 22,000 employees operating in 78 offices in 14 countries across the region. The firm was named the Best Property Consultancy in Asia Pacific at 'The Asia Pacific Property Awards 2011 in association with Bloomberg Television'. For further information, please visit our website, www.ap.joneslanglasalle.com

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