Where Have All The Buyers Gone? URA released yesterday monthly price and sales data of new residential units sold in the month of February which continued to reaffirm our view on the uncertainty in the physical property market, translating to caution on the part of both developers and buyers, leading to overall soft sales of new units by developers, with new sales declining 47% m-o-m from 320 units in January to an anaemic 170 units in February.
Price Levels Generally Maintained. Prices, however, were generally maintained at previous levels for now though given the small volume of sales for the month, this may not be indicative of the overall pricing trend – as developers that have booked good sales in the past year and have improved their balance sheet could have the luxury of maintaining their asking prices for the moment.
Playing The Waiting Game. With the economic uncertainty arising from sub-prime concerns still weighing down sentiment in the property market, leaving both developers and buyers waiting on the sidelines for the near-term, no catalyst is in sight. The developers with more diversified landbanks and stronger balance sheets are at an advantage, as they can play this waiting game for longer – maintaining asking price levels while timing any new launches to cater to the market segment where demand is relatively strongest. Buyers, on the other hand, sensing a potential dip in prices, are also waiting and holding out from committing to any purchases.
With the waiting game likely to be played out for at least another quarter, we maintain our Neutral stance on the Residential Property Sector, since overall economic fundamentals for Singapore remain healthy in the medium-term.
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