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Singapore

JLL’s perspective: Private residential units sold by developers in February 2015

Modest pick-up in demand while market continues to absorb overhang in supply


Singapore, 16 March 2015 In February 2015, developers sold 382 private homes, a 2.1 per cent increase from the 374 units taken up in the previous month. However, launches by developers declined by 15.2 per cent, from 421 units in January to 357 units, possibly due to the seasonal slowdown associated with the Lunar New Year festivities as well as the shorter calendar days.

While demand (in terms of units sold) has been on the upswing since January, it is not sufficient to convince developers to launch new projects with the exception of Sims Urban Oasis, which placed 200 out of 1,024 units in the market, at a median price $1,397 psf. The project managed to sell 112 units during the month of launch. No Executive Condominiums (ECs) were launched in the month.

Although there was a modest pick-up in market activity compared to January 2015, the 382 units sold in February 2015 represents the lowest February sales since the 174 units sold in February 2008, when the market was adversely affected by the global financial crisis and recession.

Overall, given the web of policies curbing the market demand, developers' sentiments have been further taunted by the accumulated stock of unsold units sitting on their hands. Based on JLL's analysis of the developers' sales data which dates back to 2010, there are approximately 6,741 units that have been launched but remain unsold as of February 2015. This is an improvement of 2 percent from the 6,883 units in January, and a stark improvement to the peak of 7,266 in May 2014. The highest on record is 7,309 units in May 2012.  

Launched but Unsold Inventory

JLL-16-Mar-2014-URA-Feb-2015.png

Source: URA, JLL Research

Overall, in our opinion, the market remains weak but stable. Developers and buyers are likely to remain cautious with developers likely to feel the pressure more given the state of the unsold inventory (both launched and unlaunched) at some 21,000 units.

Dr Chua Yang Liang, Head of Research & Consultancy at JLL commented, "Developers are likely to undertake innovative measures to move stocks over the coming months.  Based on the performance in the first two months of 2015, the projected (annualised) release is 4,668 units. However we reckon that demand could pick up over the next few months as further downside adjustment to prices coupled with other marketing measures could bring back more buyers, taking the full year volume to between 4,800 to 5,800 units." 

​  Table 1:Total island-wide (landed and non-landed excluding ECs) units sold by developers ​ ​ ​ ​ ​
 Feb-14Jan-15Feb-15m-o-m changey-o-y change
CCR533626-28%-51%
RCR8810718371%108%
OCR598231173-25%-71%
Island-wide7393743822%-48%
Take-up Rate107%89%107%  
Source: JLL, URA


Table 2: New Launches (ex. EC) ​ ​ ​ ​ ​ ​ ​
LocalityDevt nameLowest pxMedian pxPrice rangeLaunchedSold Take-up rate
RCRSIMS URBAN OASIS$1,282 $1,397 $266 20011256%
​Source: JLL, URA​​