Unsold inventory may support property sales amidst weakening take-up rates

There was unsold inventory of about 34,413 units by the end of Q2.

After seeing strong developer sales in August, three property launches held 14-15 September posted subdued take-up rates compared to the 20% benchmark post-cooling measures, according to UOB Kay Hian.

Also read: Chart of the Day: Check out the top selling private home projects in August

Meyer Mansion sold only 10.5% or 21 of its 200 units during the September weekend launch. The Antares and Uptown @ Farrer disposed only 6.8% and 12.9% of their units, respectively, over the weekend.

“Arguably, the three projects are also testing new benchmark PSFs in their vicinity, such as Meyer Mansion ($2,747 psf ASP), The Antares ($1,760 psf ASP), and Uptown @ Farrer
(c.$1,800-1900 psf ASP),” Adrian Loh, analyst at UOB Kay Hian said in a report.

The average take-up rate for new launches has been at about 23%, Jefferies Singapore analyst Krishna Guha wrote in a note.

Despite dismal take-up rates, overall sales volume may receive a boost in the coming months. “The wide-plethora of options (ie unsold inventories from c.80 new launches between Jan 18-Aug 19) will help to support overall new sales volume at the expense of lower take-ups at individual projects,” said Loh.

Also read: Chart of the Day: Unsold residential inventory hit 37,800 units in Q1

There was also an unsold inventory of around 39,413 units by the end of Q2, equivalent to four-five years of sales, UOBKH data show.

Developers are expected to ramp up new launches after the seventh lunar month, with notable projects Midtown Bay and Pullman Residences with 219 and 340 units, respectively.

Property developers in Singapore sold 81% more units in August YoY at a total of 1,122, or 1,167 units if including executive condo. This adds to a total of 6,757 units so far this year, which is expected to reach 8,500-9,000 units for the whole year.

On a month-on-month basis, the sold units were 5% lower. Total sales for the last two months declined 1.7% YoY.