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17-12-12, 17:41
Home units sold down 44% in November QoQ
But two tell tale signs indicate market's inner strength.
URA reported today that develpers sold 1,087 private homes in November, down 44.2% from the previous month's 1,948 units.
Property analyst at Savills Alan Cheong said that at prima facia, the numbers look 'surprisingly weak' as excluding ECs, they were expecting 1,900 units to be sold. However, if we examine the conditions leading to this outcome, Savills notes taht we can find a perfect explanation, and that is there were no major launches in November.
Here's more from Alan Cheong:
Projects like Echelon (508 units), Sennett Residences (338 units) and Spottiswoode Suites (175 units) did not make it to the starter’s block. As demand for new homes tend to chase supply, the dearth of large project launches in any month would have a negative bearing on sales numbers.
The low sales numbers for November therefore does not detract from the fact that had there been a substantial number of new launches, demand would have followed suit. The market’s inner strength comes from 2 tell tale signs. One is seen from the sales of Eco Sanctuary, which though the statistics show only a 29% sales rate for November, but today, it is about 50% sold. Secondly, although 1,087 non EC units were sold in the month, only 773 units were launched, representing a sales to launch ratio of 1.4. For the month of October, this ratio was 1.19 when 1,633 units were launched against 1,948 unit sales.
The November sales figures gives us a trove of information to analyze how the market may perform when no large projects were launched. Moving to December, we may see a slight uplift in sales if the Echelon comes to the block. If so, we may possibly witness sales of about 1,300 units.
The days of high-1000 to greater than 2000 unit monthly sales may be a thing of the past as this year’s numbers were elevated by the mammoth 2011 GLS programme.
From 2013 to 1H2014, with the GLS programme producing units at a more sedate rate, annual sales for the non-EC market may fall to the 10,000 – 12,000 units, giving an average monthly sales of 830 – 1,000 units.
However, prices are still set to increase due mainly to land cost inflation.
-sbr
But two tell tale signs indicate market's inner strength.
URA reported today that develpers sold 1,087 private homes in November, down 44.2% from the previous month's 1,948 units.
Property analyst at Savills Alan Cheong said that at prima facia, the numbers look 'surprisingly weak' as excluding ECs, they were expecting 1,900 units to be sold. However, if we examine the conditions leading to this outcome, Savills notes taht we can find a perfect explanation, and that is there were no major launches in November.
Here's more from Alan Cheong:
Projects like Echelon (508 units), Sennett Residences (338 units) and Spottiswoode Suites (175 units) did not make it to the starter’s block. As demand for new homes tend to chase supply, the dearth of large project launches in any month would have a negative bearing on sales numbers.
The low sales numbers for November therefore does not detract from the fact that had there been a substantial number of new launches, demand would have followed suit. The market’s inner strength comes from 2 tell tale signs. One is seen from the sales of Eco Sanctuary, which though the statistics show only a 29% sales rate for November, but today, it is about 50% sold. Secondly, although 1,087 non EC units were sold in the month, only 773 units were launched, representing a sales to launch ratio of 1.4. For the month of October, this ratio was 1.19 when 1,633 units were launched against 1,948 unit sales.
The November sales figures gives us a trove of information to analyze how the market may perform when no large projects were launched. Moving to December, we may see a slight uplift in sales if the Echelon comes to the block. If so, we may possibly witness sales of about 1,300 units.
The days of high-1000 to greater than 2000 unit monthly sales may be a thing of the past as this year’s numbers were elevated by the mammoth 2011 GLS programme.
From 2013 to 1H2014, with the GLS programme producing units at a more sedate rate, annual sales for the non-EC market may fall to the 10,000 – 12,000 units, giving an average monthly sales of 830 – 1,000 units.
However, prices are still set to increase due mainly to land cost inflation.
-sbr