(B) News on property sales in Singapore

All is quiet in the front line; and that may hurt developers’ bottom line at the end of the day. A combination of negative factors had pushed back scheduled launches this year and the moves look more like a resignation to fate than a result of a strategic insight.

(B.1) No major new launches and those launched did not do well

Now that the Chinese New Year is over, some property developers are starting to release some smaller new projects outside the prime areas to test the volatile market. However, the sale performance was not something the developers could shout about.

For example, a freehold 28-unit boutique project in Telok Kura, Costa Este, which was launched recently only sold 4 units at a price range of between $873 and $926, though its developer is asking for $980 psf for some units.

Palm Galleria launched recently only sold one unit at $871 psf.  Another nearby project, Espira Spring, sold 10 at prices ranging from $727 psf to $884 psf.

Waterfront Waves’ public launch received an indifferent response with only 20 units sold.

Frasers Centrepoint and Far East Organization have put up only 180 units to test the market, including the 80 units that were sold during the preview. The first weekend sale result brought the tally of 100 transactions. So far, 180 units at the 405-unit development have been released.

Recently, crowds at the show flats have dwindled to pockets of five to ten people at any one time. As such, there might not be any major new projects being launched until the bruised sentiment is nursed back to health.

(B.2) Weak market sentiment causes more major developers to delay launches

More major developers have decided to delay launches following the indifferent showing at the showrooms.

City Developments (CDL) executive chairman Kwek Leng Beng said that, if necessary, he can hold off launches of new developments until next year.

If the market conditions did not worsen by the middle of the year, CDL will launch more than 400 units in four projects, including 77 units at Shelford Suites in Bukit Timah, 100 of the 228-unit Quayside Isle @ Sentosa Cove, and another 100 at a new development on the former Lock Cho Apartments in Balestier Road, which will have 336 units.

(B.3) Wheelock delays launches of prestigious projects to later dates

Likewise, Wheelock Properties will delay the scheduled launch of Orchard View at Angullia Park to probably middle of the year, pending a more certain picture of the global economy.

The developer will launch Ardmore III next year. In the meantime, it would focus on the construction / completion works of The Sea View condo in the Amber Road area and The Cosmopolitan at the Kim Seng Road area. The two projects are slated for completion in the first-half of 2008 and mid 2008 respectively. Ardmore III is slated for completion in 2012.

No reasons were given for the delay in launches. However, it is not difficult to hazard a guess that it was the poor buying sentiment that has pulled the handbrake for the developer.

(B.4) Analysis of New home sale performance by Regions

For the whole of January 2008, developers launched 410 new home units and sold 316 of them. The dismal sales figure is only a slight improvement over the 305 sold in December last year where 445 new units were launched.

The sale figure of 316 new private homes (excluding ECs) sold in January was the worst since URA started showing developers' monthly sales figures and prices in June 2007.

Prices also mirrored the tentativeness of the market and remained largely flat, with a slight dip in the overall median prices – due to more units selling at lower prices.

Only 103 new units were sold in the Core Central Region (CCR) in January. None of those units sold achieved above $4,000 per sq ft (psf). The following projects in CCR sold only one unit in the whole of January 2008 and they include:

Table [1] – CCR Primary Sale performance (part 1)

The following projects in CCR had more transactions and the details are as follows:

Table [2] – CCR Primary Sale performance (part 2)

The total sale figure of 103 ‘units sold’ was unimpressive and the sale prices were all below $2,000 psf. Many so-called District 9 projects are actually bordering District 8 and are furthest away from the glamour, such as Estilo, Mt Sophia Suites, Parc Mackezie, Wilkie 80, and Wilkie Studio.

Median prices for new private homes, excluding executive condos and landed homes, fell 3.2% from $1,124 psf in December to $1,088 psf last month.

The lowest transacted price was $737 psf for a unit at Coastal View Residences in Jalan Loyang Besar, while Scotts Square in Scotts Road achieved the highest at $3,671.

A dismal sale volume of 51 transactions were recorded in the Rest of Central Region (RCR).

Table [3] – Primary sale figures * in Rest of Central Region (RCR) in Jan 08 * [condos or apartments unless indicated]

Projects outside the central region (OCR) performed slightly better with 139 transactions. In all, 220 new units were launched in OCR - the highest since August 2007 when the bad news from the US started to surface.

Table [4] – Primary sale figures * in Outside Central Region (OCR) in Jan 08 * [condos or apartments unless indicated]

In the primary market, 15 (or almost 40%) out of the 38 projects which saw some transactions are located in District 15.

District 15 certainly has become the darling of investors and home owners alike. Its popularity can be seen from the number of units transacted in the primary as well as secondary market outside District 9, 10 and 11, when compared with other districts.

(B.5) Performance of private secondary market from 1 Jan 08 to 8 Mar 08

In terms of secondary sale, out of the 1,235 units sold in the RCR and OCR for the first two months of 2008, 172 or about 14% are located in District 15. In other words, District 15 out-sold every other district in Singapore so far this year and has, without a doubt, become a high profile growth area.

The secondary market did not perform any better either. The resale volume of 1,235 units within the first two months of the year was a 26.66% slide from the 1,684 units transacted in the same period last year.

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