Policy risks remain, warns analyst on property

Sales boosted by new launches. Some 1,825 homes were sold in May 11. Excluding ECs, 1,575 homes were sold, a slight 12% drop from April levels but still up 46% yoy. Sales were lifted by new launches in OCR, including larger projects like Belysa, Foresque Residences, Terrasse, The Foresta @ Mount Faber and smaller projects like Auralis and Celyon Point. Spurred by the OCR launches, buying interest shifted back to mass-market projects. Smaller-unit projects remained popular on account of their affordability (lower absolute quantums) in an environment where physical prices remain elevated.

Policy risks remain. While sales were weaker mom, yoy growth was still very strong and we believe buying sentiment has not waned. Take-up was also strong at 1.2x of the launched units with ongoing sales from previously-launched projects. We believe the government could continue to keep a watchful eye over the property market. More cooling measures could be expected, particularly with pressures to adopt a more ‘promasses’ approach after recently-concluded elections.

Price upside likely limited. With physical prices remaining elevated, affordability could feature more prominently going forward. On the ground, sales have reportedly slowed in recent weeks though prices in general continue to hold. Nevertheless, with imminent supplies from increased physical completions and the continued rollout of sites from the Government Land Sales (GLS) programme; interwoven with a demand mismatch from the adoption of a less liberal immigration policy, we see little price upside from current levels.