Developer sales rebounded 58% MoM from 279 units sold in April to 441 in May, the highest take-up in six months, mainly on more new launches in the Core Central Region (CCR).
The signs are mixed, take-up was mainly from shoebox apartments of 400-600 sq ft that are affordable on a quantum basis (Vutton, 71% sold) and large luxury units that were seemingly priced at significant discounts from last year?s peak (Nassim Park Residences, 56%). Excluding these two projects, take-up rates for new launches averaged a dismal 24%.
Median selling prices continued to slide: -2% MoM to S$900/sq ft in May vs -7% in April.
We believe it is difficult for developers to lower prices significantly in existing projects for fear of antagonising earlier buyers. However, some developers are starting to lower prices for new projects eg. Dakota Residences, Shelford Suites, Nassim Park Residences.
While developers have generally underperformed, we expect more negative news flow: potential rising interest rates,
deteriorating economic data,
global slowdown,
historical high supply and
lower rents,
to hold back any sustainable rally at the stock levels.
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