SINGAPORE (May 17): DBS’s top picks for beneficiaries to the potential relaxation of property measures in Singapore are UOL Group and Frasers Centrepoint even though most developers have re-rated following the positive sentiment in the Singapore property market.
Despite 25% lower new launches from a year ago, primary sales in April rose 49% on year, as private homes sales doubled while Executive Condominiums (ECs) fell 32%.
“Positive sentiment is returning to the property market as shown in the record sales in both the primary and secondary markets in the last two months,” says DBS analyst Rachel Tan in a Tuesday report.
As expected, sales were largely from new project launches such as Seaside Residences and Artra, while sales on existing projects improved, such as EC Sol Acres, Parc Riviera and Commonwealth Towers which were among the top five best sellers.
Similarly, secondary transactions in April grew 34% largely from private homes while EC sales fell 33%. Secondary sales were largely in the Central region with the top four projects listed as Pollen & Bleu by UIC/Singland (34 units), Gramercy Park by City Developments (13 units), Leedon Residence by Guocoland (12 units) and One Balmoral by Hong Leong (11 units). Total sales grew 44% y-o-y.
“Property developers are bringing forward their new launches to catch the ‘euphoric’ wave, however, we note that 1Q17 property price index (PPI) was still on a downtrend, and new property launches are likely to taper off in 2H17,” says Tan.
With strong sales volume and dwindling residential supply, the government may increase land supply soon to prevent potential overheating, she adds.
“We continue to track sales volume and believe sustainable strong volumes are a prelude to a recovery in property prices.”
UOL shares are down 7 cents at $6.93 while Frasers Centrepoint is trading at $1.86.
(See also: Singapore's property comeback fueled by land-hungry developers)
