Property Devt & Invt - Uptick in May home sales
Shared By Stock Fanatic on Tuesday, June 19, 2018 | 19.6.18
■ Pace of new launches has accelerated; take-up rates remain healthy.
■ Maintain sector Overweight. Top picks remain UOL and City Developments
May sales surged 53% mom
● May monthly private home sales came in at 1,121 units (1,257 including executive condominiums) which is 53% higher mom and 8% above the May 2017 level. The bulk of the sales were in the Outside Central Region with 40% of total new sales coming from Twin Vew in the West Coast area and another c.12% of sales from new projects such as Amber 45 and Sixeen35 Residences. The rest were well spread out.
YTD sales at 32% of our full-year expectation
● 5M18 take-up rate of 3,480 homes (4,476 including ECs) is still well within our expectation of 11,000-12,000 units for this year and we maintain our projections for now. However, we note that while the take-up rate for May was still healthy, it was slightly lower at 1.06x (5M18 average: 1.11x) as the number of new launch units more than doubled from over a month ago.
More new launches; anticipate price growth trajectory to moderate
● A number of new projects such as Affinity at Serangoon, The Gardens Residences and Margaret Ville have rolled out their launches in June at record pricing in their vicinity. In addition, new developments such as Rivercove Residences (former Rio Casa) have also started registering buyer interest. With more projects coming onstream, we anticipate the price growth trajectory to remain positive, but at a more moderate pace, for the remainder of this year.
Remain sector Overweight as valuations improve
● Share prices of Singapore developers have declined by c.5% in the past one month, in tandem with the broader market, and valuations, at 44% discount to RNAV and 0.71x P/BV, have retraced back to the -1 s.d. levels. At this juncture, we find Singapore developers inexpensive and maintain our Overweight stance. We continue to prefer the big-cap names such as UOL and City Dev.
● Potential catalysts are good take-up rates for new launches, while a key risk is faster-than-expected rise in interest rates which would erode affordability.
Source : CGSCIMB Research
Posted on Tuesday, June 19, 2018 |
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Labels: Property Sector