Another active month in Nov

■ Nov monthly home sales rose 70% mom and were double Nov 2020 levels, thanks to good take-up at Canninghill Piers.
■ 11M21 transactions rose 39.4% yoy to 12,697 units, while non-landed private resale home prices were up 0.8% mom in Nov 21.
■ Reiterate sector Overweight on valuations. Sector top picks: CIT and UOL.

Robust Nov monthly home sales thanks to new project launch

● Nov 21 monthly home sales came in at 1,610 units. Excluding executive condos (ECs), private home sales were at 1,547 units, double the volume of Nov 20 and 70% above Oct 21 levels. The best-selling project for the month was Canninghill Piers, which accounted for 37% of the month’s volume. Other projects that saw brisk sales include The Commodore and Normanton Park. Rest of Central Region (RCR) made up 59% of monthly volume transactions; suburban projects (Outside Central Region) accounted for
another 30% of sales; CCR projects accounted for 11% of volume sales.

11M21 new transaction volume up 39.4% yoy

● Transactions in the f irst eleven months of 2021 totalled 12,697 units (+39.4% yoy) and exceeded our full-year expectations of up to 12,000 units. Meanwhile, according to Singapore Real Estate Exchange (SRX) data, the estimated resale transactions in Nov 21 were 2.4% higher mom and 21.8% higher than a year ago, with 1,636 units changing hands.

Home prices continued to pace up modesty mom

● According to SRX resale price index, non-landed private resale home prices rose 0.8% mom in Nov 21, underpinned by stronger price increases in OCR. This translated into a 9.1% price appreciation for 11M21. With demand still robust, w e expect home prices to further rise by 0-5% in 2022F. We anticipate prices to stay supported by continued buying interest and to pace economic recovery.

Reiterate sector Overweight

● Developers’ valuations still look inexpensive to us, trading at a 47% discount to RNAV, close to 1 s.d. below long-term mean discount. With the residential market still enjoying brisk transaction activities, w e prefer developers with visible residential pipelines and strong balance sheets that would enable them to tap into any opportunities during this slow er cycle. Our preferred picks are CIT and UOL. Sector re-rating catalysts: good sell-through rates for new launches. Downside risks: faster -than-expected interest rate hikes and property cooling measures that could dampen the demand for housing.