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

Dearth of Fresh Launches leads Buyers to Higher Sales in Previously Launched Projects

​SINGAPORE, 17 September 2012 – The URA monthly sales volume for private residential units (excluding executive condominiums (ECs)) dipped 27% m-o-m from 1,946 units in July to 1,421 units in August, only slightly higher than the lowest point of the year when 1,371 units were sold in June. Overall it seems like the traditional taboo associated with making housing purchases during the Hungry Ghost Festival has slowly faded away while developers are generally more spooked than buyers. Since 2011, this traditional lull in demand no longer seems relevant.

There has been a dearth of fresh launches leading to higher sales in previously launched projects. For example, of the 1118 units launched for sale in August, only 341 units came from fresh launches while 777 units were from projects that were launched previously. Mr Ong Teck Hui, National Director Research Singapore, Jones Lang LaSalle, comments: “This is in stark contrast with the earlier months in the year when fresh launches accounted for the bulk of new supply for almost every month”.
Island-wide sales in the Outside Central Region (OCR) and Core Central Region (CCR) saw the greatest fall in buying activity of 45% and 15% respectively (Table 1). Buyers in the Rest of the Central Region (RCR) however, defied superstition to register two consecutive months of buoyant sales activity with a growth of 103% m-o-m. Islandwide take up rates of new projects has been on a gradual rise since May 2012 suggesting the existence of a strong residual demand in the market.

Spooked by the Hungry Ghost Festival, the number of launches island-wide fell by 37% m-o-m to 1,118 units, which translates to a take-up rate of 127% island-wide in August 2012 as demand strongly outweighed supply.

Table 1: Total island-wide (landed & non-landed excluding ECs) units sold

New sales and launches in the OCR were at their lowest levels for the year, with sales declining 49% and launches also falling by an equally large 48%. However, take up rates in the OCR are still strong at 129% indicating the presence of latent demand in the segment. As an example, Parc Olympia which had no new launches for the month still saw sales of 100 units, with River Isles also moving 55 units despite no launches in the month.

The RCR saw very strong growth in sales, rising 103% from 181 in July to 368 in August. Accompanied by a higher than average take up rate of 147%, this suggests that strong demand also exists in this segment of the market. One Dusun at Balestier was the star performer in the RCR, moving 153 of 154 units launched. Its central location and attractive price quantum, accompanied with very few other RCR projects launched for the month, contributed to a strong take up rate of 99%.

The CCR saw only one new launch, with Leedon Residence making available 70 units, of which 27 (39% take up rate) were sold. The segment as a whole saw a meeting of expectations between developers and buyers, with an almost similar number of new launches (219 units) as there were purchases (218 units). V on Shenton typified this meeting of expectations, with a 100% take up rate with all 65 units launched in the month being sold.

Dr Chua Yang Liang, Head of Research South East Asia, Jones Lang LaSalle comments: “Policy risk is low given that demand has generally contracted. Should the Property Price Index (PPI) see a surge in 3Q, then we might see more measures coming into the market. Overall, on a long term trend, the demand for new sales is slowing down, particularly on a 3 month moving average basis (Chart 1)”.

URA piz.jpg

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Notes to editors
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 $47.2 billion of assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 22,200 employees operating in 79 offices in 14 countries across the region. The firm was named ‘Best Property Consultancy’ in nine Asia Pacific countries at the International Property Awards Asia Pacific 2012, in association with HSBC, and was highly commended in a further three countries. For further information, please visit
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