Non-Landed Sale

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Transcript of Non-Landed Sale

  • Gradually stabilising prices Private residential property prices continued their decline for the eleventh consecutive quarter. The price

    decline decreased slightly by 0.1% in 2Q 2016. Overall for H1 2016, prices moderated by 0.6%. This is

    less than the 1.9% in H1 2015. Prices decreased mainly in the Outside Central Region (OCR), where a

    0.5% decline was registered. The Core Central Region (CCR) and Rest of Central Region (RCR) both

    saw prices increases by 0.3% and 0.2% respectively.

    As prices have been declining for a few years, buyers have been scouring the market for good buys and

    this has contributed to some form of price support for centrally located properties in the CCR and RCR.

    Buyers remain very price sensitive in todays market and most of the transactions are concluded in the

    $1million to $1.5million range.

    Higher transaction volume Transaction volume increased by 59.2% in 2Q 2016. For H1 2016, there were 6,806 transactions, a

    9.1% increase from the 6,239 transactions in H1 2015. Both the resale and new sale segments

    experienced a boost in volume. This figure was boosted by successful project launches such as GEM

    Residences and Sturdee Residences. Investor demand continues to be strong, with 1 and 2 bedroom

    units being the most popular amongst buyers.

    The resale market also experienced a surge in demand. Part of this might be due to developers

    introducing new schemes for completed projects (which are considered resale), such as dLeedon, The

    Interlace and OUE Twin Peaks. These schemes have proven to be popular with buyers and has led to

    an increase in take up for units.

    Also, buyers continue to pick up value buys. For instance, a unit at Turquoise at Sentosa Cove was sold

    on the resale market for $3.8 million, while the previous caveat indicated a transaction price of $7.2

    million back in 2007. The difference in price is 47%. A unit at Paterson Suites was sold at $3.6 million on

    17 June while the previous caveat was recorded at $6.46 million

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  • Figure 1: Quarter on quarter change in price indices of private residential properties

    Period Overall Non-Landed Non-Landed Residential

    CCR RCR OCR

    2Q 2015 -0.8% -0.6% -0.6% -1.1%

    3Q 2015 -1.5% -1.2% -1.6% -1.6%

    4Q 2015 -0.2% -0.3% -0.4% 0%

    1Q 2016 -0.6% 0.3% 0% -1.3%

    2Q 2016 -0.1% 0.3% 0.2% -0.5% Source: URA, ERA Research

    Figure 2: Transaction volume

    Source: URA, ERA Research

    Figure 3: Major new launches

    Project Name Location Locality Units Launched Take Up Price Range (psf)

    Sturdee Residences Beatty Road RCR 305 55.7% $1,410-$1,799

    Stars of Kovan Upper Serangoon Road OCR 180 51.7% $1,225-$1,554

    GEM Residences Lorong 5 Toa Payoh RCR 578 55.4% $1,262-$1,544

    Source: URA, ERA Research

    Sustained interest in luxury market In 2Q 2016, despite the lack of new project launches, new sales volume in the CCR was still promising.

    162 units were sold by developers. Units sold were from a variety of projects, including Cairnhill Nine,

    which was recently launched in 1Q 2016, Sophia Hills and Gramercy Park. Median prices trended slightly

    downwards, to $2,343 per square foot for 2Q 2016 from $2,392 per square foot in 1Q 2016.

    The prime resale market was more active in comparison. There were 555 units transacted at a median

    price of $1,817 per square foot. However, much of this figure was contributed to by sales of delicensed

    projects by developers. OUE Twin Peaks and Ardmore Three were two of the projects which were most

    popular among buyers. There were 117 and 35 caveats lodged for the two projects respectively in 2Q

    2016. The units were sold at a median of $2,579 per square foot for OUE Twin Peaks and $3,177 per

    square foot for Ardmore Three before discounts.

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  • We can see that buyer interest is still very much alive in the luxury market. At prices above $2,000 per

    square foot, there are still takers for the units. In addition, buyers of luxury properties fall in to two distinct

    groups. The first group is the investors, who mainly purchase smaller units and rent them out. The other

    group consists of owner occupiers who generally buy larger units, upwards of 2000 square feet.

    Figure 4: New sales data in the CCR

    Source: URA, ERA Research

    Figure 5: Secondary sales in the CCR

    Source: URA, ERA Research

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  • Buyers active in city fringe areas In the RCR, two new projects were launched in the second quarter of the year, Sturdee Residences and

    GEM Residences. Both performed relatively well, selling out 41% and 54% of their total units respectively.

    Small units made up the bulk of the transactions, with the one and two bedders being the most popular

    among buyers. Both projects had unique selling points which set them apart from their competition.

    Sturdee Residences is located within walking distance of Farrer Park MRT station, and hence offers

    buyers a city living experience. GEM Residences offered residents a club like lifestyle with 24 hour

    concierge service which is usually only found in high end condominium projects.

    Besides new launches, buyers also picked up units in previously launched projects. Reasonably priced

    projects which are located near MRT stations continue to be favoured by buyers, with projects such as

    The Poiz Residences, being consistently among the best-selling. This shows that there is sustained

    demand for existing projects; and buyers are discerning; going for projects which offer them the best

    value for their money. Due to these factors, new sales in the RCR in 2Q 2016 reached 1,031 units, with

    a median price of $1,486 per square foot.

    On the resale front, activity was also present. 573 sellers found buyers at a median price of $1,227 per

    square foot. These buyers are likely purchasing for own stay and hence have turned to the resale

    market to make their purchases as the units offer more generous living spaces and can be occupied

    relatively faster.

    Figure 6: New sales data in the RCR

    Source: URA, ERA Research

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  • Figure 7: Secondary sales in the RCR

    Source: URA, ERA Research

    Suburban properties still popular Despite there being only one new launch (Stars of Kovan) in the quarter, transaction volume in the OCR

    was rather optimistic, with there being 1,034 new units sold and 825 resale cases. Existing projects

    formed the bulk of the new sales, with Stars of Kovan only managing to move 93 units out of a total of

    395. Other projects which performed well include Kingsford Waterbay, Kingsford Hillviewpeak and The

    Glades.

    Due to the large number of properties on sale in the OCR, prices are still correcting. In 2Q 2016, it was the

    only segment in which prices decreased, according to URAs private property price index. Upgraders from

    public housing will find suburban properties to be a compelling purchase.

    Figure 6: New sales data in the OCR

    Source: URA, ERA Research

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  • Figure 7: Secondary sales in the OCR

    Source: URA, ERA Research

    2016 expected to be similar to 2015 With economic headwinds and cooling measures still present, we do not expect a sudden rebound in

    prices any time soon. With prices being more stable, we expect an overall price decrease for 2016 to be

    2% to 2.5%, improving from the 3.7% price decline in 2015.

    Buyer sentiment has been improving, as we see the number of transactions picking up on both the new

    sales and resale fronts. Accordingly, going by H1 2016 numbers, total transaction volume should remain

    comparable to 2015s, at 14,000 to 16,000 units.

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