New home sales hold steady mom
? Apr 2022 monthly ex-EC new home sales held steady mom at 653 units.
? Resale and HDB resale volumes remained stable, even as prices ticked up.
? Reiterate sector Overweight on valuations. Sector top picks: UOL and CIT.
Home sales held steady in Apr
? Apr 22 monthly home sales came in at 839 units. Excluding executive condos (ECs),
private home sales amounted to 653 units in Apr 22 (-48.2% yoy, flat mom) as
availability of new launch units remained limited during the month. Rest of Central
Region (RCR) made up 44% of monthly sales, led by Normanton Park, Riviere and
One Pearl Bank. Suburban projects (Outside Central Region, OCR) accounted for
another 24% of sales. Core Central Region (CCR) projects made up a higher 32% of
volume sales in Apr, with the more popular projects being The Avenir, Fourth Avenue
Residences and Irwell Hill Residences. New home sales for the first four months of
2022 amounted to 2,533 units, 47% lower than the same period last year
Private and HDB resale volumes was flat to slightly lower mom
? Meanwhile, according to Singapore Real Estate Exchange (SRX) data, private resale
transactions declined 2.2% mom (-31.3% yoy), while HDB resale volume was flat mom
(-2.9% yoy). We maintain our primary home sales volume projection at 10,000 units in
2022F, or close to the 2020 level. With the launch of Piccadilly Grand in May 2022, to
a 77% sell-through rate on the first weekend of launch and the upcoming roll-out of
Liv@MB, we believe transaction volumes for May could remain robust.
Home prices continue to tick up mom
? Despite the lower sales activity, the URA property price index recorded a 0.7% qoq
improvement for 1Q22, supported by a 2.2% price hike for OCR properties.
Meanwhile, according to SRX, private/HDB resale prices continued to rise by a
0.7%/1.1% mom, in Apr 2022, bringing YTD price improvements to 2.7%/3.7%. 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 UOL and CIT. Sector rerating catalysts: good sell-through rates for new launches. Downside risks: faster-thanexpected interest rate hikes, slower economic outlook and property cooling measures
that could dampen demand for housing.