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16-07-13, 10:44
http://www.businesstimes.com.sg/premium/top-stories/developer-sales-seen-slowing-july-after-june-surge-20130716
Published July 16, 2013
Developer sales seen slowing in July after June surge
Sale of 1,806 private homes excluding ECs last month reflects 24% hike from May
By Kalpana Rashiwala
[SINGAPORE] Developer sales surged 23.8 per cent month on month in June to 1,806 private homes (excluding executive condominiums or ECs). The sales volume was propped up by the 737 units that were sold at the J Gateway condo in Jurong on a single day on June 28 as its developer and buyers raced to beat the new Monetary Authority of Singapore (MAS) regulations that took effect the following day.
Going by the Urban Redevelopment Authority's (URA) latest figures, developers have moved 10,061 units in the first six months, or a monthly average of 1,677 units.
Market watchers generally expect sales this month to slow down markedly, as seen in the current knee-jerk reaction phase following the rollout of the Total Debt Servicing Ratio framework by MAS - before the various players adjust to the more rigorous checklist for banks for approving property loans.
Savills Singapore research head Alan Cheong says developers' private home sales volume this month could be as low as half the June figure. Colliers International director Chia Siew Chuin too reckons that July sales could ease to around 1,000 units before recovering in the following months.
Based on Colliers' full-year forecast of 15,000-17,000 units, the second-half figure will range from 4,939 to 6,939 units, translating to a monthly average of 823 to 1,157 units in H2. CBRE's prediction reflects a monthly average sales volume of 990-1,323 units for developers in H2.
DTZ has a more bullish number: 1,157-1,657 units; the upper end of its range is close to the 1,677-unit average monthly sales in the first half. It sees demand gravitating towards units of smaller size and lower price quantum. "Developers will likely continue with launches given the risks of holding back, but they will read the barometer on ground sentiment very carefully," said DTZ chief operating officer Ong Choon Fah. "Developers will be more mindful about pricing. They'll be more cautious to take into account the recent regulatory changes and the volatile outlook for interest rates."
Colliers' Ms Chia suggests that developers' launch strategies could turn "more aggressive in terms of timing and incentives as it would be more advantageous for them to launch sooner rather than later, given the latest changes in the market".
"In turn, this could continue to be supportive of home demand," she says.
Desmond Sim, associate director at CBRE Research, however, predicts that in the short run, developers with deep pockets will continue to hold prices at current levels.
While most houses readily made forecasts on developer sales for H2, one seasoned property consultant says it is "extremely difficult to forecast the number of private homes to be launched and sold in the next few months as the market is still adjusting to the new measures". Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, says developers are closely tracking the market and, in the face of uncertainty, could delay launches or offer a smaller tranche of units - which could translate to lower monthly sales figures in the near future.
Nicholas Mak, executive director of SLP International, suggests that faced with the hurdle of a more rigorous bank loan approval process lasting four to five days, one solution could be for developers to allow a serious potential buyer to make a conditional booking, subject to securing the loan within a week.
Based on the URA's data, after J Gateway, the second best-seller in June was Jewel@Buangkok, with 282 units sold at a median price of $1,183 per square foot (psf). The two projects prove once more the popularity of suburban condos near MRT stations. The two accounted for nearly 75 per cent of the 1,361 private homes (excluding ECs) developers sold last month in the Outside Central Region (OCR). June's OCR sales volume reflects an 87 per cent jump from May's 728 units.
Going by Colliers' price-band analysis of the URA data, the proportion of private homes sold by developers priced up to $1,000 psf plunged from 23 per cent in May to 5 per cent in June. The majority (57 per cent) of transactions last month were in the over $1,000 psf to up to $1,500 psf band, followed by 32 per cent of deals in the over $1,500 to up to $2,000 psf band. The property consultancy group highlighted that the 737 units in J Gateway, a mass-market project in the up-and-coming Jurong Lake District, were sold last month at between $1,239 psf and $1,774 psf, or a median price of $1,486 psf - a new high for the area.
Islandwide, the 1,806 private homes (excluding ECs) developers found buyers for last month was up 31.7 per cent year on year.
Developers also moved 313 EC units, a public-private housing hybrid, in June, down from 457 units for May and 354 units in June last year. The top-selling EC project last month was Forestville. The project, which is located in Woodlands Drive 16, saw 226 units changing hands at $730 psf median price.
According to CBRE, upcoming project launches include Keppel Land's The Glades near Tanah Merah MRT Station, Singapore Land and UOL's condo development in Bright Hill Drive, and a CDL-Hong Leong mixed development in Tai Thong Crescent near Potong Pasir MRT Station.
Published July 16, 2013
Developer sales seen slowing in July after June surge
Sale of 1,806 private homes excluding ECs last month reflects 24% hike from May
By Kalpana Rashiwala
[SINGAPORE] Developer sales surged 23.8 per cent month on month in June to 1,806 private homes (excluding executive condominiums or ECs). The sales volume was propped up by the 737 units that were sold at the J Gateway condo in Jurong on a single day on June 28 as its developer and buyers raced to beat the new Monetary Authority of Singapore (MAS) regulations that took effect the following day.
Going by the Urban Redevelopment Authority's (URA) latest figures, developers have moved 10,061 units in the first six months, or a monthly average of 1,677 units.
Market watchers generally expect sales this month to slow down markedly, as seen in the current knee-jerk reaction phase following the rollout of the Total Debt Servicing Ratio framework by MAS - before the various players adjust to the more rigorous checklist for banks for approving property loans.
Savills Singapore research head Alan Cheong says developers' private home sales volume this month could be as low as half the June figure. Colliers International director Chia Siew Chuin too reckons that July sales could ease to around 1,000 units before recovering in the following months.
Based on Colliers' full-year forecast of 15,000-17,000 units, the second-half figure will range from 4,939 to 6,939 units, translating to a monthly average of 823 to 1,157 units in H2. CBRE's prediction reflects a monthly average sales volume of 990-1,323 units for developers in H2.
DTZ has a more bullish number: 1,157-1,657 units; the upper end of its range is close to the 1,677-unit average monthly sales in the first half. It sees demand gravitating towards units of smaller size and lower price quantum. "Developers will likely continue with launches given the risks of holding back, but they will read the barometer on ground sentiment very carefully," said DTZ chief operating officer Ong Choon Fah. "Developers will be more mindful about pricing. They'll be more cautious to take into account the recent regulatory changes and the volatile outlook for interest rates."
Colliers' Ms Chia suggests that developers' launch strategies could turn "more aggressive in terms of timing and incentives as it would be more advantageous for them to launch sooner rather than later, given the latest changes in the market".
"In turn, this could continue to be supportive of home demand," she says.
Desmond Sim, associate director at CBRE Research, however, predicts that in the short run, developers with deep pockets will continue to hold prices at current levels.
While most houses readily made forecasts on developer sales for H2, one seasoned property consultant says it is "extremely difficult to forecast the number of private homes to be launched and sold in the next few months as the market is still adjusting to the new measures". Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, says developers are closely tracking the market and, in the face of uncertainty, could delay launches or offer a smaller tranche of units - which could translate to lower monthly sales figures in the near future.
Nicholas Mak, executive director of SLP International, suggests that faced with the hurdle of a more rigorous bank loan approval process lasting four to five days, one solution could be for developers to allow a serious potential buyer to make a conditional booking, subject to securing the loan within a week.
Based on the URA's data, after J Gateway, the second best-seller in June was Jewel@Buangkok, with 282 units sold at a median price of $1,183 per square foot (psf). The two projects prove once more the popularity of suburban condos near MRT stations. The two accounted for nearly 75 per cent of the 1,361 private homes (excluding ECs) developers sold last month in the Outside Central Region (OCR). June's OCR sales volume reflects an 87 per cent jump from May's 728 units.
Going by Colliers' price-band analysis of the URA data, the proportion of private homes sold by developers priced up to $1,000 psf plunged from 23 per cent in May to 5 per cent in June. The majority (57 per cent) of transactions last month were in the over $1,000 psf to up to $1,500 psf band, followed by 32 per cent of deals in the over $1,500 to up to $2,000 psf band. The property consultancy group highlighted that the 737 units in J Gateway, a mass-market project in the up-and-coming Jurong Lake District, were sold last month at between $1,239 psf and $1,774 psf, or a median price of $1,486 psf - a new high for the area.
Islandwide, the 1,806 private homes (excluding ECs) developers found buyers for last month was up 31.7 per cent year on year.
Developers also moved 313 EC units, a public-private housing hybrid, in June, down from 457 units for May and 354 units in June last year. The top-selling EC project last month was Forestville. The project, which is located in Woodlands Drive 16, saw 226 units changing hands at $730 psf median price.
According to CBRE, upcoming project launches include Keppel Land's The Glades near Tanah Merah MRT Station, Singapore Land and UOL's condo development in Bright Hill Drive, and a CDL-Hong Leong mixed development in Tai Thong Crescent near Potong Pasir MRT Station.