Property developers warned against lacklustre home demand in Q4

Beware of aquisition plans, offer price, says analyst.

Accordng to Knight Frank, investment sales in the residential sector is likely to remain fairly muted, in view of the lower number of GLS sites under the Confirmed List in 2H 2013 and slower sales performance in the private home market particularly in 3Q 2013. 

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The recent TDSR ruling has effectively reduced homebuyer demand, with total private residential new sales volume having dropped below the 1,000-unit level at 482 units and 742 units in July and August 2013 respectively.

Given the possibility of slower sales as homebuyers are more price-sensitive amid the tighter loan requirements, property developers are likely to be more measured in their acquisition plans and offer price, especially in the private residential collective sales segment.

While investment sales of public GLS sites is expected to be more active, developers could be more prudent in their selection of sites.

Investment interest in EC sites, however, is likely to remain high with at least 6 to 8 bidders vying for each EC site. There are currently 5 EC sites under the 2H 2013 GLS Confirmed List and 1 EC sites under the Reserve List.