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News Release

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

Sales volume starts to recover in the Rest of Central and Core Central Regions


SINGAPORE, 15 May 2012 – The URA monthly sales volume for private residential units (excluding executive condominiums (ECs)) increased by 4% m-o-m in April 2012 to 2,487 units, the third consecutive quarter where sales have been in excess of 2,000 units. While sales volume in the Outside Central Region (OCR) remained healthy, the growth in sales this month came from the Rest of Central (RCR) and Core Central (CCR) Regions.
 
Table 1: Total island-wide (landed & non-landed excluding ECs) units sold
 Apr-11 Mar-12 Apr-12 m-o-m change y-o-y change
CCR 306 57 106 86% -65%
OCR 1,014 1,825 1,514 -17% 49%
RCR 485 511 867 70% 79%
Island-wide 1,805 2,393 2,487 4% 38%
Take-up Rate 88% 93% 104%  
 
Sales activity improved in the CCR following the introduction of ABSD in December as local buyers started to support the prime residential market. In April, 106 units were sold in the CCR, an increase of 86% m-o-m as confidence in the market improved and developers launched a larger number of units, 126 in total, a 207% m-o-m increase. Several new projects were launched in the CCR, the largest of which was at 8 Bassein where all 74 units were made available for sale, although only 16 units were sold. In addition, an initial six units were launched at TwentyOne Anguilla Park with three being sold at an average price of SGD 3,958 per sq ft. Landed development Barker 9 was also launched in April, with one of the six available units sold.
 
The RCR also saw a boost in sales volume in April and the number of units sold increased by 70% m-o-m to 867 units as more supply was added to the market. A number of new launches provided fresh supply to attract buyers into this region, most notably at EON Shenton (100 units), Sky Habitat (180 units) and Katong Regency (244 units). All three projects proved popular with buyers, achieving in excess of 70% sales in the month and Katong Regency successfully sold all 244 units at the development. The overall take-up rate in the RCR in April reached 135% as the fresh supply reignited interest in previously launched projects in the region with sales activity picking up at projects including Thomson Grand (30 units launched, 68 sold) and Riviera 38 (6 units launched, 15 sold).
 
Having sustained sales volumes in excess of 1,800 units in February and March, sales fell in the OCR by 17% m-o-m to 1,514 units. After several large launches in the first quarter of 2012, the number of units launched also fell, down by 24% m-o-m to 1,618 units. Several new projects were released in April, including Hillsta, where 406 units were launched and 154 units sold, The Promenade @ Pelikat, where 164 units were launched and 106 sold and Seahill, where 120 units were launched and 26 sold.
 
The recent result is a new record since 2009, which saw the historical peak of 2,772 units in July that year. The April demand is just 10% shy of this peak since the series started in 2007. This strong market demand has also permeated upwards into the high end segment which recorded more than 100 units sold after a long hiatus of weak market demand since August 2011.
 
Based on caveats lodged, the median prices of new sales in the OCR has been rising more than CCR resulting in the gap between OCR and CCR closing from 2.5 in June 2007 (when the monthly developer sales series started) to 1.8 times in April 2012. This has motivated more Singaporean buyers to enter the CCR market as evidenced by the recent developer sales result. This trend of a bottom up support of the high end segment can be expected to continue.
 
In light of the strong sales performance in the first four months of 2012, we have revised our previous forecast for 2012 upwards to between 18,000 – 20,000 units, provided no further policy measures are introduced. So far in 2012, sales volume has reached 9,169 units. Based on the three year average from 2008 – 2011, monthly sales volume was approximately 1,300 units, which would equate to an annual total of 19,569 units in 2012. Should further policy measures be introduced we would expect this level to fall to between 15,000 and 16,000 units, a discount of between 18-23% on our projected total.
 
Nonetheless, the risk of further policy intervention to maintain more stable market demand cannot be ruled out. We hold our earlier position that the policy to curtail excessive demand of developers sales could come into the market within the next few weeks, possible measures include more stringent control over the issuance of developers’ sales licenses and further tightening of existing policies.

 
Source: Jones Lang LaSalle Research, URA REALIS, assessed May 15, 2012
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