Slower activity in Feb
? Feb monthly private home sales volume fell 18% yoy to 527 units.
? Meanwhile, SRX data showed that private and HDB resale prices continued
to inch up 0.6% mom, respectively, despite slower sales activity.
? Reiterate sector Overweight on valuations. Sector top picks: CIT and UOL.
Feb home sales continued to decline
? Feb 22 monthly home sales came in at 559 units, the lowest level since May 2020.
Excluding executive condos (ECs), private home sales amounted to 527 units in Feb 22
(-18% yoy, -22.5% mom) due to the Lunar New Year lull, property cooling measures
announced in Dec 2021 as well as a low 194 new units released from existing projects
for sale during the month. Rest of Central Region (RCR) made up half of monthly sales,
led by Normanton Park and Avenue South Residences, which accounted for slightly less
than half of RCR sales. Suburban projects (Outside Central Region, OCR) accounted
for another 30% of sales, while Core Central Region (CCR) projects accounted for 19%
of volume sales. New home sales for the first two months of 2022 amounted to 1,207,
47% lower than the same period last year.
Private and HDB resale volumes declined yoy
? Meanwhile, according to Singapore Real Estate Exchange (SRX) data, private resale
transactions declined 23.9% yoy while HDB resale volume also dipped 12% yoy, due in
part to the Lunar Year festive period as well as viewing restrictions on the back of higher
Covid-19 cases. We maintain our primary home sales volume projection at 10,000 units
in 2022F, or close to the 2020 level.
Home prices continued to inch up marginally mom
? Despite the lower sales activity, according to SRX, private and HDB resale prices
continued to rise by a similar 0.6% mom in Feb 2022. Within the private resale segment,
RCR and OCR continued to see price increases of +1.1% and +0.6% mom, respectively,
while CCR prices decreased by 0.3% mom. We maintain our expectation for private
home prices to rise by 0-5% in 2022F, broadly in tandem with GDP growth projections.
Reiterate sector Overweight
Developers’ valuations still look inexpensive to us, trading at a 42% discount to RNAV,
close to 1 s.d. below the long-term mean discount. We prefer developers with visible
residential pipelines and strong balance sheets that would enable them to tap into any
opportunities during this slower cycle. Our preferred picks are CIT and UOL. Sector rerating catalysts: good sell-through rates for new launches. Downside risks: faster-thanexpected interest rate hikes and property cooling measures that could dampen demand
for housing.