Developers gear up for flurry of launches before year-end

Kalpana Rashiwala

AFTER selling 7,220 private homes in the first nine months, developers are gearing up for a final burst of launch activity before taking the traditional year-end breather.

Oxley Holdings is due to begin its preview soon for the 548-unit Kent Ridge Hill Residences. Singapore Press Holdings and Kajima Development are expected to finally begin sales soon of The Woodleigh Residences next to Woodleigh MRT Station, while City Developments is expected to roll out its Whistler Grand condo in West Coast Vale.

Savills Singapore senior director of research and consultancy, Alan Cheong, envisages a pricing game being played out in the coming quarters.

“Developers are basically studying one another- but not quite knowing for sure where the demand will come. A mistake by one developer of overpricing a project at launch – will be the gain of the developer that launches the next project because it can then undercut the first developer to entice buyers.

“But subsequently, the developer that mispriced its project would still have a chance to make a comeback if it gets its pricing right for a future development. At the end of the day, the launch game will continue, sustained by continuous ratcheting up of prices – which by itself will create demand,” he argued.

The Urban Redevelopment Authority’s figures released on Monday, based on its survey of licensed housing developers, showed a strong pick-up in private home sales in the primary market in September, bolstered by new launches following the end of the Hungry Ghost Festival.

Developers sold 932 private homes last month, up 51 per cent from the 617 units they moved in August and also nearly 42 per cent higher than the 657 units they booked in September last year.

Last month’s sales figure marks the highest September new home sales since 2013.

On the launch front, developers released 1,169 private homes last month – almost 2.2 times the 534 units in the previous month and 16 times the 73 units launched in September 2017.

The September 2018 launch figure is the highest monthly figure so far this year – with the exception of July, when the 2,239-unit launch number was distorted by hasty launches on the evening of July 5 to avoid the cooling measures that took effect the following day.

JLL national director Ong Teck Hui said that market confidence seems to have improved with seven new private residential projects launched in September, including Jadescape near Marymount MRT Station, Jui Residences by Selangor Dredging along Serangoon Road, The Addition near Potong Pasir MRT Station, Mayfair Gardens near King Albert Park MRT Station, and The Jovell in the Loyang area.

“The launch momentum builds on the four projects placed on the market in August (which was affected by the Hungry Ghost festival).

“Post cooling measures, 12 projects were launched in the space of two months – which compares favourably with 24 launches in the first seven months of the year,” said Mr Ong.

But while developers have grown more confident in launching projects, "they are still grappling with setting an appropriate price level to attract buyers," he said. "Those who do better in pricing (taking into account location and other attributes) manage to achieve better sales take-up.

The 7,220 private homes, that developers sold during January to September this year is down 17 per cent from the 8,702 units in the same period last year.

CBRE’s head of research for Singapore and Southeast Asia, Desmond Sim, noted: “While demand exuberance is restrained by existing measures, developers are also observed to be phasing out their launches, drip-feeding the market with supply so as to react to market movements accordingly.”

September’s top-selling project was JadeScape on the former Shunfu Ville site, with 327 units sold at a median price of S$1,669 per square foot.

Other projects that sold well last month included Mayfair Gardens (82 units sold at a median price of S$1,945 psf) as well as projects launched earlier, such as Stirling Residences (which saw 89 units sold at S$1,743 psf median price); Park Colonial next to Woodleigh MRT Station (80 units sold at a median price of S$1,751 psf); and Riverfront Residences in Hougang (56 units sold at S$1,320 psf median price).

Cushman & Wakefield Singapore senior director and head of research Christine Li said: “Post-cooling measures, market demand remains resilient but buyers are now more value-conscious and selective, especially when the number of new launches have increased.

“Should developers decide to take competition head-on by launching projects at the same time between October and November, they may need to adjust the pricing strategy accordingly. Otherwise, they may want to consider holding back the launches to next year when the dust settles post-cooling measures.”

Eugene Lim, key executive officer of ERA Realty Network, expects developers to move 9,000 to 10,000 private homes for the whole of 2018, down from the 10,566 units in 2017.

“With a wide selection of new projects coming up, buying demand is not expected to increase significantly as buyers evaluate their housing needs, options and finances,” he said.

“We have not observed significant price discounts yet. Developers who have bought land at high prices would need to sell even higher in order to remain profitable. This provides support for property prices in the short term, barring any external shocks.”

Amid the ongoing dearth of new executive condominium (EC) launches, developers moved just 12 EC units last month, down from the 23 units in August and the 249 units in September 2017.

ECs are a public-private housing hybrid.

This article first appeared in The Business Times on Oct 16, 2018.