Analysis of new launches showed low take-up rates at launch weekends of 10 to 20 percent compared to 30 to 60 percent in previous years. This comes as RHB’s analysis of new launches showed low take-up rates at launch weekends of 10 to 20 percent compared to 30 to 60 percent in previous years.
With muted price growth expectations for residential properties, RHB Research expects no near-term catalysts for developers with large local market exposure.
This comes as RHB’s analysis of new launches showed low take-up rates at launch weekends of 10 to 20 percent compared to 30 to 60 percent in previous years.
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“This is not surprising, as buyers – being price-conscious – are adopting a wait-and-see approach amidst a huge supply in the pipeline,” said RHB analyst Vijay Natarajan.
He expects the trend to continue, with only certain projects with strong attributes and pricing outperforming the rest. Overall, Natarajan expects the primary sales volume to stand at 8,000 to 10,000 units this year.
“For the private resale market, we expect volumes to remain steady versus last year on the back of en bloc sellers looking for immediate replacement homes, spillover demand from new launches and the release of units previously held back on the expectation of potential en bloc sales.”
Meanwhile, flash estimates from the Urban Redevelopment Authority (URA) showed that overall property prices dropped 0.6 percent quarter-on-quarter following a 0.1 percent quarter-on-quarter dip in Q4 2018.
The high-end segment registered the biggest drop at 2.9 percent quarter-on-quarter. RHB attributed this to its susceptibility to the new cooling measures as a high proportion of its buyers are investors and foreigners.
With less than 50 projects in the launch pipeline, buyers have plenty of choices – limiting developers’ pricing power.
“Developers also have little room to cut prices in new launches as many are sitting on expensive land acquired during the recent en bloc cycle.”
With this, RHB expects “price growth to stay flattish in the zero to two percent range this year”.
Get more details on the property market outlook for 2019 here
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
