Uptick in Mar home sales
? Mar 2022 monthly private home sales volume rose 20.7% mom to 654 units.
? Meanwhile, SRX data showed that private and HDB resale prices continued
to inch up 0.8%/0.7% mom, respectively, in Mar despite slower sales activity.
? Reiterate sector Overweight on valuations. Sector top picks: UOL and CIT.
Mar home sales ticked up mom
? Mar 2022 monthly home sales came in at 702 units. Excluding executive condos
(ECs), private home sales amounted to 654 units in Mar 22 (-49.5% yoy, +20.7%
mom) due to the impact of property cooling measures announced in Dec 2021, as well
as the small quantum of 309 new units released for launch in Mar 22. Rest of Central
Region (RCR) made up close to half of monthly sales, led by Normanton Park, One
Pearl Bank and Avenue South Residences, which accounted for c.40% of RCR sales.
Suburban projects (Outside Central Region, OCR) accounted for another 28% of
sales. Core Central Region (CCR) projects accounted for a higher 32% of volume
sales in Mar 22 (vs. 19% in Feb), with Leedon Green, The Avenir and Haus on Handy
being the more popular projects. New home sales for the first three months of 2022
amounted to 2,012 units, 53% lower than the corresponding period in 2021.
Private and HDB resale volumes up mom, remain below last year’s
? Meanwhile, according to Singapore Real Estate Exchange (SRX) data, private resale
transactions rebounded 35.6% mom (-31.4% yoy), while HDB resale volumes grew
19.2% mom (-7.3% yoy). We maintain our primary home sales volume projection at
10,000 units in 2022F, or close to the 2020 level. We believe that with the relaxation of
Singapore’s Safe Management Measures, allowing more unique household visitors
from 29 Mar, more viewings can be done, that would potentially translate to more
robust volumes going forward.
Home prices continued to tick up mom
? Despite the lower sales activity, according to SRX, private and HDB resale prices
continued to rise by a 0.8%/0.7% mom, respectively, in Mar 22. Within the private
resale segment, CCR and OCR continued to see price increases of +0.6% and +1.4%
mom, respectively, while RCR prices decreased by 0.2% 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 arising during this slower cycle. Our preferred picks are UOL and CIT.
Sector re-rating catalysts: good sell-through rates for new launches. Downside risks:
faster-than-expected interest rate hikes, weaker economic outlook, and property
cooling measures that could dampen demand for housing.