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Thread: Fewer launches as developers await upturn

  1. #1
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    Default Fewer launches as developers await upturn

    Fewer launches as developers await upturn

    73 private homes launched last month - less than 10 per cent of the number released in August

    OCT 17, 2017

    KALPANA RASHIWALA


    DEVELOPERS launched just 73 private homes last month - less than a tenth of what they released in August, and the lowest figure since December 2014's 53 units.

    The Chinese Festival of the Hungry Ghosts, two-thirds of which fell in September, may have been partly the reason for this, but observers suggest that developers have also been holding back on launches of private residential projects lately, in the hope of riding a price recovery next year.

    Lee Nai Jia, head of research in Edmund Tie & Company, said: "A few developers have stopped selling their projects and closed their showflats for now, and will probably re-open them after Chinese New Year.

    "I sense developers are holding back new launches with the approaching year-end school holiday and travel season. It makes more sense for developers to gear up for launches after Chinese New Year, when demand can be expected to be strong, supporting higher prices."

    With fewer new units on the market, developers' sales contracted 47.3 per cent month on month to 657 private homes in September.

    Year on year, however, the figure was up 29.1 per cent, going by data released on Monday by the Urban Redevelopment Authority (URA), based on its surveys among licensed housing developers.

    [IMG]www.businesstimes.com.sg/sites/default/files/image/2017/10/17/BT_20171017_KRURA17BOXB_3133960-page-001.jpg[/IMG]

    The preliminary third-quarter figure for developers' private home sales figure stands at 3,015 units, 2 per cent lower than in the previous quarter, but up 52.2 per cent year on year.

    In the first nine months, developers' sales surged 60.1 per cent year on year to 9,054 private homes.

    In addition, they moved 3,596 executive condominium (EC) units (a public-private housing hybrid) between January and September - up 10.1 per cent year on year.

    JLL national director Ong Teck Hui highlighted that this jump comes despite a 41.5 per cent year-on-year drop in the number of EC units launched in the first nine months of this year.

    "While demand has been buoyant, supply has become limited, with only 1,620 unsold, launched EC units," he said.

    The figure comprises 1,591 uncompleted and 29 completed units as at end-Q2 2017, a drop of 53.6 per cent year on year.

    No new EC projects or units were launched in September, and yet developers' sales for ECs was still "quite healthy" at 249 units, noted ZACD Group executive director Nicholas Mak. The September EC sales figure was down from 341 units sold the month before; year on year, it was also a fall from the 260 units sold in September 2016.

    Mr Mak noted that only one EC project is now in the pipeline - Hoi Hup Realty and Sunway Developments' 600-plus unit project in Anchorvale Lane, which is expected to be launched next year.

    "At the current rate of sales, the developers' inventory of launched and unsold EC units - which slipped to only 698 units in September - would be exhausted before Christmas if there are no new project launches.

    "As a result, there could be overwhelming pent-up demand for this project, and its developer is in a highly-enviable sweet spot."

    PropNex Realty chief executive Ismail Gafoor agreed with this view, but highlighted that the project's developer would nevertheless be sensible about pricing it, given that ECs come with many restrictions, including a S$14,000 monthly household income ceiling and 30 per cent mortgage servicing ratio cap.

    Last month's top-five selling projects chalked up sales of between 40 and 48 units each. These were Parc Life and The Criterion EC projects, and Kingsford Waterbay, Symphony Suites and Principal Garden private housing developments.

    In the private-housing segment, at least two projects are slated to be released soon. One is Sing Holdings and Wee Hur's 735-unit Parc Botannia in Fernvale Road, which is expected to be launched around mid-November.

    The other, also expected to be launched next month, is Roxy-Pacific's 48-unit Navian freehold apartment development in Jalan Eunos. The project will be priced at an average of about S$1,500 psf.

    Mr Ismail expects developers to end the year with sales of about 4,000 EC units and 11,000 to 12,000 private homes. Last year, they moved 3,999 EC units and 7,972 private homes.

    ERA Realty Network key executive officer Eugene Lim predicts primary market sales for this year will come in at 3,800 to 4,200 EC units and 10,000 to 12,000 private homes.

    CBRE Research's head of Singapore and South-east Asia, Desmond Sim, said: "There are very limited launches identified in the pipeline; this might be a dampener to an otherwise encouraging full-year volume."

    Most analysts believe that private home prices have turned around. Earlier this month, the URA said that, based on its Q3 2017 flash estimate, its private home price index rose 0.5 per cent quarter-on-quarter, its first rise after 15 consecutive quarters of decline.

  2. #2
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    Developer so confident? Rental haven't even turn yet although the decline is slowing down.

  3. #3
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    I am feeling quite bored. Property market too slow. Waiting for excitment to come but dont know when?

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    I think another 3 billion dollars worth of en-bloc will jolt it to life.

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    Quote Originally Posted by star View Post
    I am feeling quite bored. Property market too slow. Waiting for excitment to come but dont know when?
    After low blood sugar and fainted, even after conditions improve, will need a bit more time to jump and play games right? Boring is good, just be patient and kwa hee.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  6. #6
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    The media trying to sensationalise new launches again. Hungry Ghost Month has always been a low period of launches so what is new? A new low? There is ample supply coming up ahead for en-blocs and large sites bought in the last 18 months. If anyone is looking for a steep uptick will be quite disappointed. We are on an uneven keel of low migration and low rental take ups. Hang tight.

    2 cents,
    PropVestor

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    Quote Originally Posted by PropVestor View Post
    The media trying to sensationalise new launches again. Hungry Ghost Month has always been a low period of launches so what is new? A new low? There is ample supply coming up ahead for en-blocs and large sites bought in the last 18 months. If anyone is looking for a steep uptick will be quite disappointed. We are on an uneven keel of low migration and low rental take ups. Hang tight.

    2 cents,
    PropVestor
    Parc Botannia has timed it well to open the showflat this saturday and ballot on 11/11. the earlier greedy developers hold back till next year and en bloc sites ready for sale only from H2 2018 at least. Parc Botannia has minimal competition over the next half a year or so to sell out.

    Disclaimer: Vested in the developer.

  8. #8
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    We need ample take up numbers to keep the momentum going. I hope re-sale will be doing good too. All the best to Sing and WH, they do have lots of experience. Timing is everything for new launches.

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    seems like resale is still weak because of the lower rentals but the en bloc displacement could help that situation a little. in the meantime, the mass market new launches are doing well because of hdb upgraders it seems.

  10. #10
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    Yes, displacements from large en-bloc will have some effect on rental but that is short term and not sustainable since en-bloc sites will be new developments with more units ppr. One displaced unit might yield 1.5 more in the same site. Some en-bloc windfalls might downgrade to smaller multiple units (help kids with their first downpayment) and that will lift some volume in the immediate term. I see prime luxury not going that exuberance route anytime soon for resale, correct me if I am wrong.

    Politically, I sense that PAP will re-direct focus on the mass market before GE 2020/2021. Both infrastructure and housing will need to have some rejuvenation (URA Masterplan refresh-annoucements in 2018 is well timed in that sense).

    2 cents,
    PropVestor

  11. #11
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    there won't be exuberance in CCR for some time but both demand and supply has been quite stable. rental has also stabilised albeit at lower yields. Any surge in foreign buying (not for yield but for parking cash) will cause CCR prices to go up.

    Quote Originally Posted by PropVestor View Post
    Yes, displacements from large en-bloc will have some effect on rental but that is short term and not sustainable since en-bloc sites will be new developments with more units ppr. One displaced unit might yield 1.5 more in the same site. Some en-bloc windfalls might downgrade to smaller multiple units (help kids with their first downpayment) and that will lift some volume in the immediate term. I see prime luxury not going that exuberance route anytime soon for resale, correct me if I am wrong.

    Politically, I sense that PAP will re-direct focus on the mass market before GE 2020/2021. Both infrastructure and housing will need to have some rejuvenation (URA Masterplan refresh-annoucements in 2018 is well timed in that sense).

    2 cents,
    PropVestor

  12. #12
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    Quote Originally Posted by PropVestor View Post
    Yes, displacements from large en-bloc will have some effect on rental but that is short term and not sustainable since en-bloc sites will be new developments with more units ppr. One displaced unit might yield 1.5 more in the same site. Some en-bloc windfalls might downgrade to smaller multiple units (help kids with their first downpayment) and that will lift some volume in the immediate term. I see prime luxury not going that exuberance route anytime soon for resale, correct me if I am wrong.

    Politically, I sense that PAP will re-direct focus on the mass market before GE 2020/2021. Both infrastructure and housing will need to have some rejuvenation (URA Masterplan refresh-annoucements in 2018 is well timed in that sense).

    2 cents,
    PropVestor
    On the URA Masterplan updates, how can we know about this? From the media?

  13. #13
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    https://www.ura.gov.sg/uol/DC/view-m...s/master-plans

    URA Masterplans are refreshed every 5 years. 2018 will be the time URA will likely announced for 2019 release. The last release being 2014. GE will likely be held before 2020.

    Hence, my point about the timing.

  14. #14
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    I think now HDB upgraders are desperately dumping their HDB to switch to private. Hence, the dropping of HDB price by 0.7% as compared to previous quarter of 0%. I believe this trend will continue for a while. HDB dropping while private goes up as upgraders are taking the chance to do so.

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    Quote Originally Posted by thomastansb View Post
    I think now HDB upgraders are desperately dumping their HDB to switch to private. Hence, the dropping of HDB price by 0.7% as compared to previous quarter of 0%. I believe this trend will continue for a while. HDB dropping while private goes up as upgraders are taking the chance to do so.
    Not really true, there are a lot of different reason to sell HDB.

    One main reason is the wealth creation if HDB is stopping you then you need to sell.

    Use to think HDB is the road to wealth creation, boy was I wrong.

    Still, don't understand pm me.

    Just refinance my 2 PC and renew my two rental property, waiting patiently for the mother of all wealth transfer.

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