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Singapore

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

Sharp drop in market activity with lowest number of private homes (excl. EC) sold in 2012


​SINGAPORE, 17 December 2012 – The URA monthly sales volume for landed and non-landed private residential units (excluding executive condominiums (ECs)) decreased 44% m-o-m from 1,948 units in October to 1,087 units in November. After removing the impact of the traditional year-end slowdown, the effects of the housing loan tenure, having been in place for 2 months since 5 Oct 2012 and imposed by the Monetary Authority of Singapore (MAS), have begun working through the property market. Anecdotal evidence of developers offering discounts on their unsold units in the past month seems to indicate that the slowdown in sales is not due to just the year-end seasonality. To separate the effect of the year-end slowdown, we looked to Oct-Nov periods from 2007 to the present day and found that Oct-Nov 2009 was the only period when sales slowed m-o-m by 26%, less than the 44% m-o-m decline currently experienced. Apart from 2009, sales volumes in the Oct-Nov period in the last 5 years increased by varying degrees of between 6 and 79%.

The Core Central Region (CCR), performing the best across all market segments, reversed its prior 43% m-o-m decline to register a 45% increase from 144 units sold in Oct to 209 in November. Sales in the Outside Central Region (OCR) fell a second consecutive month by 52% from 1,482 to 711 units, compared to a milder decline of 28% between Sept and Oct. The Rest of Central Region (RCR) fared the worst with a decline of 48% from 322 to 167 units sold, compared to a rise of 4.5% between Sept and Oct.

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

Sales in the OCR were driven mainly by the newly launched Eco Sanctuary where 140 units were sold out of 161 launched. Despite not releasing new units, previously launched Waterbay, Riversails and Bartley Residences have performed well in November, moving a total of 208 units or 30% of total OCR sales.

The best new release in RCR was Edenz Suites at Geylang where all 31 units launched were sold out. Edenz, with 33 units of size <500 sqft and only a single unit >500 sqft, received very strong buyer interest due to absolute price affordability and the potential of fetching attractive rental yields. Aura 83, selling 21 out of 51 units launched and nestled in the landed property enclave of Duku Road was another new launch in the RCR.

The best m-o-m sales performance across the island occurred in CCR where 209 units were sold, representing a 45% increase compared to a decline of 43% between Sept and Oct. The robust sales volume was driven mainly by sales at D’leedon (133 units sold in the month) and despite a new launch of only 1 project, Devonshire 12, where all 20 units were released.

Mr Ong Teck Hui, National Director, Research & Consultancy, Jones Lang LaSalle comments:
“Although the year-end holiday season is setting in, the sharp drop in both units launched and sold in November does reflect impact from the loan tightening measures imposed in October. 773 private homes launched for sale in November is way below the average monthly launch of 1,987 units for the first ten months of the year. It shows that developers are holding back launches in view of demand uncertainties arising from the recent measures. The dearth of new launches in the month has also contributed to the low take-up of 1,087 private homes, which is a 44% drop from the previous month.

The slowdown in units launched and sold by developers in November is similar to that in December 2011 when units launched and sold fell drastically following the announcement of the ABSD. In November 2011, 1,967 units were launched while 1,702 units were sold. After the ABSD, only 937 units were launched and 632 units sold in December 2011. While the market entered 2012 with more positive sentiments leading to a sales rebound, we are approaching 2013 with more uncertainty due to a more challenging economic environment. One would be less confident in expecting a similar rebound under present circumstances.

Notwithstanding a slower market in November, we are still headed for a record year of developer sales as the 20,879 private residential units sold in the first 11 months of 2012, surpasses the 15,904 units sold last year and the 16,292 in 2010.
 


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 www.ap.joneslanglasalle.com
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