Singapore developer sales dropped a massive 30% to 14,678 units

[princess_morbucks]

Will this help roll back tightening measures?

According to Barclays, the recent softening of the residential market in terms of volumes and prices and a significant cutback in the government’s land sales programme might have raised hopes that the government will unwind its existing tightening policies for property.

"We believe this is premature as prices are still elevated, and we believe a 10-15% correction is warranted before the government rolls back policies that took four years to have an obvious impact," Barclays said.

Here's more from Barclays:

We would still prefer to wait to become more positive even if the government decides to roll back the measures as historically home prices have continued to slide on weak fundamentals, which we expect to prevail until 2015 or even 2016.

Developer sales fell 30% y/y in the 11 months to November 2013 to 14,678 units from 20,880 units sold in 11M12. We expect December volumes to have declined sequentially, resulting in full-year sales of 15,500 units in 2013 (-30% y/y).

We expect 2014 volumes to be worse as the Total Debt Servicing Ratio (TDSR) rules in place since June 2013 continue to bite, and also as buyers become cautious due to the looming oversupply situation.

- See more at: http://sbr.com.sg/residential-proper....2Ptb5QBb.dpuf

[Wunderkind]

Will this help roll back tightening measures?

According to Barclays, the recent softening of the residential market in terms of volumes and prices and a significant cutback in the government’s land sales programme might have raised hopes that the government will unwind its existing tightening policies for property.

"We believe this is premature as prices are still elevated, and we believe a 10-15% correction is warranted before the government rolls back policies that took four years to have an obvious impact," Barclays said.

Here's more from Barclays:

We would still prefer to wait to become more positive even if the government decides to roll back the measures as historically home prices have continued to slide on weak fundamentals, which we expect to prevail until 2015 or even 2016.

Developer sales fell 30% y/y in the 11 months to November 2013 to 14,678 units from 20,880 units sold in 11M12. We expect December volumes to have declined sequentially, resulting in full-year sales of 15,500 units in 2013 (-30% y/y).

We expect 2014 volumes to be worse as the Total Debt Servicing Ratio (TDSR) rules in place since June 2013 continue to bite, and also as buyers become cautious due to the looming oversupply situation.

- See more at: http://sbr.com.sg/residential-proper....2Ptb5QBb.dpuf

It will get worse before it gets better.

Many buyers are not willing to commit to purchase as they are expecting the price to fall amidst the supply overhang. This waiting game with supply of houses more than demand coupled with fewer purchases will cause the price to drop further. Developers may be forced to sell below current market price to close sales.

[mcmlxxvi]

Most developers in the current market play are mid to large sized with considerable holding power.

[ichigo55]

SG is losing the edge to London because of ABSD ...
how long will this last?

[wt_know]

sales volume drop only ... $psf sibei firm
ulu ocr 99lh condo, no $1,000psf no talk

[玉格格]

SG is losing the edge to London because of ABSD ...
how long will this last?

nid to keep dropping until after GE2016. bobian, alrdy promise ppl liao, else 钨砂帽不保~

[princess_morbucks]

Only 118 units were launched.

According to Barclays, while December is usually a weak month,, given the festivities, sentiment was poorer in 2013 after the TDSR rules in June. Developers launched only 118 units (-92% m/m).

With no new condo launches, sporadic sales were recorded from previous launches.

Here's more from Barclays:

Duo Residences, launched in November, sold another 11 units at a higher median price of S$2,394 psf vs S$1,999psf in November, bringing to-date sales to 89% of its 660 units.

Alex Residences sold another 6 units at a median price of S$1,810psf, vs S$1,706psf in November, bringing to-date sales to 174 units or 41% of the total 429 units.

The Creek at Bukit, sold only 2 more units at lower median price of S$1,533psf vs S$1,637 in November, brings to-date sales to 47 units or 18% of a total 260 units.

The 726-unit The Glades sold another 18 units at S$1,477psf, bringing take-up to 121 units, or just 17% since its launch in September, despite its proximity to the Tanah Merah MRT station.

- See more at: http://sbr.com.sg/residential-proper....VvyCrJRp.dpuf

[ichigo55]

i can understand ... a promise is a promise ...
still got many pockets to take ... no worries
just started with two pockets .. more to come

nid to keep dropping until after GE2016. bobian, alrdy promise ppl liao, else 钨砂帽不保~

[玉格格]

i can understand ... a promise is a promise ...
still got many pockets to take ... no worries
just started with two pockets .. more to come

now still nid to continue to wayang lah, else ppl will kpkb again

[3C]

Fire Sales is coming to town.

Heard quite a few agents already changed job.

Suddenly all Bulls went into hiding.

Bears appearing soon

[proud owner]

Fire Sales is coming to town.

Heard quite a few agents already changed job.

Suddenly all Bulls went into hiding.

Bears appearing soon

in 2012 3rd quarter ... I mentioned that a lot of bankers had left the industry ... and these are the TOP earners ...

I also mentioned that they had started to unload ....

My posts were like the flies on windscreen ... crushed ...


maybe now they will believe me ...


I am not saying there will be a crash ... but a dip is certain

[kane]

you planning to buy into this dip?

[proud owner]

you planning to buy into this dip?

like bro chestnut ... accumulating bullets ... prices will fall as mkt becomes more dead ... then when the start to remove some measures ...then I will come in ...

now ? no
not yet

[Ringo33]

like bro chestnut ... accumulating bullets ... prices will fall as mkt becomes more dead ... then when the start to remove some measures ...then I will come in ...

now ? no
not yet

There are 2 things to look out for during bad times. Price and Prize.
Dont just buy because of price, do look out for the best of the best facing and layout units as well.

[DC33_2008]

But what is the likely % drop in price. 10? 20? 30?

like bro chestnut ... accumulating bullets ... prices will fall as mkt becomes more dead ... then when the start to remove some measures ...then I will come in ...

now ? no
not yet

[CCR]

in 2012 3rd quarter ... I mentioned that a lot of bankers had left the industry ... and these are the TOP earners ...

I also mentioned that they had started to unload ....

My posts were like the flies on windscreen ... crushed ...


maybe now they will believe me ...


I am not saying there will be a crash ... but a dip is certain

you missed by almost 2 years,

[relax88]

i didn't know in singapore there are only 3 to 4 millionairs that has the monies to buy during down time, the rest are all transparent or non-existance, least in the virtual world

[玉格格]

prices will fall as mkt becomes more dead ... then when the start to remove some measures ...then I will come in ...

when the time comes, the bargains will be mostly resale mkt rite?
how abt new launches?
land $ is not dipping, Im wondering how much profit can developers trim?

[princess_morbucks]

Sales were still in line with 2009-11.
According to CIMB, while take-up was very low in Dec, new launches were lower. 2H13 new home sales declined over 50% from 1H13 since the implementation of TDSR.
Total new home sales in 2013 were 30% lower yoy, but largely in line with 2009-11.
Here's more from CIMB:

Buyers continue to prefer units in the outside central region (OCR) over the core central region (CCR). Goodwood Grand and Leedon Residence (both from CCR) saw low take-up rates of 35% and 3% respectively, despite making up 96% of the units launched.
While only one unit was launched in OCR, 125 units of previously launched projects were sold.
The low take-up in Dec appears seasonal and we expect launches to pick up in 2014. At this run rate, we expect total sales volume to decline by 30-35%% yoy to 10k-11k units.
We think a decline is largely expected by the market. However, inventory levels for most developers remain low. Developers have been testing the market with lower prices, smaller units and accepting lower margins.
This trend should continue as supply completions begin to escalate in 2014. We continue to expect a 10-15% decline in property prices in 2014-15 and this is starting to show through in the URA flash data and market resale prices.
One upside from lower volume and prices is the potential for the government to remove some of its property curbs currently in place.

- See more at: http://sbr.com.sg/residential-proper....0pbid67k.dpuf