Singapore - Housing 18 (Apr 19 - Dec 25)

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Geylang terrace house owner refuses to sell unit, condo developers forced to build around it
https://mothership.sg/2020/12/guillemar ... use-condo/

[behappyalways]

UOL sells 70% of units at Clavon on launch weekend at an average of $1,640 psf
https://www.edgeprop.sg/property-news/u ... e-1640-psf

[winston]

Singapore Residential Sector – Ending 2020 on a high

URA released its flash estimates for the private residential property price index for 4Q20.

The overall increase came in at 2.1% on a QoQ basis, which was above ours and the street’s expectations.

This was also the strongest QoQ increase registered since 2Q18.

For the full-year, the URA Private Residential Property Price Index saw an increase of 2.2% from end-2019 levels. This came in above our +0-1% forecast.

Overall growth was still achieved despite the debilitating effects of Covid-19 on the economy.

Looking ahead, Singapore’s economy is expected to rebound by 5.5% in 2021, based on Bloomberg consensus projections.

We forecast Singapore’s private residential property prices to increase 2-4% this year.

We believe this would be underpinned by an economic recovery in the region, expected improvement in unemployment rates, low mortgage rate environment, potential return of foreign buyers and higher expected construction costs due to Covid-19.

These could be partially offset by a bump in number of new launches, some of which were pushed back from 2020.

The FTSE ST Real Estate Holdings and Development Index (FSTREH) underperformed in 2020 due to the negative impact from Covid-19. However, the FSTREH outperformed the broader Singapore market slightly in the last two months of the year.

Despite the recent re-rating, valuations remain cheap, in our view.

The FSTREH is trading at a forward P/B ratio of 0.46x, which is still 1.6 standard deviations (s.d.) below its 10-year average (0.69x).

We expect the path to recovery to be bumpy for developers, and any negative news over the Covid-19 situation would result in volatility in share prices.

However, we remain OVERWEIGHT on Singapore developers as we see room for continued rotation into value and cyclical sectors which will benefit from the re-opening and normalisation in economic activities ahead.

Our preferred sector top picks in order of preference are CapitaLand Limited (CAPL SP), UOL Group (UOL SP) and City Developments Limited (CIT SP).

Source: OCBC

[behappyalways]

Singapore: Why these defiant 'nail house' owners refuse to sell
https://www.bbc.com/news/world-asia-55312871

[behappyalways]

S'pore flat features droolworthy winning mahjong combinations on walls
https://mothership.sg/2021/02/mahjong-h ... mbination/

[winston]

Singapore Residential Sector – When good news isn’t all cheers

Singapore’s private home prices rose 2.9% on a quarter-on-quarter (QoQ) basis in 1Q21, based on URA’s recent flash estimates.

This is tracking above the street’s expectations, and was the fourth consecutive quarter in which private home price growth accelerated from the preceding quarter.

On the other hand, the HDB Resale Price Index showed a 2.8% QoQ increase in 1Q21, based on flash estimates. This mirrored the robust performance of the private market.

Given the buoyant performance of the physical residential market in Singapore, this has undoubtedly ignited concerns over the risks of potential property cooling measures being introduced by the government.

Although we acknowledge that such risks have increased, we believe it is possible that the government might continue to adopt a wait and see approach and await the release of 2Q21 data points.

The FTSE ST Real Estate Holdings and Development Index (FSTREH) has delivered total returns of 14.1% year-to-date (YTD), slightly outperforming the Straits Times Index’s 13.3% return.

In terms of valuation, the FSTREH is now trading at a forward price-to-book (P/B) ratio of 0.55x (versus 0.48x at the start of the year). This is still 0.9 standard deviations (s.d.) below the 10-year average (0.68x).

While valuations remain cheap and we expect Singapore developers to continue to be a beneficiary of the global rotation to value and cyclical sectors given the re-opening and normalisation in economic activities, we grow more cautious on rising policy risks.

CapitaLand Limited (CAPL SP) was our number one Singapore developer pick at the start of the year. However, given its strong share price performance after its proposed restructuring, our rating has changed to ‘Hold’.

We maintain our ‘Buy’ ratings on UOL Group (UOL SP) and City Developments Limited (CIT SP) although potential upside is now only slightly above 10% given their re-rating over the past five months (since the Pfizer and BioNTech vaccination news first broke).

Source: OCBC

[winston]

Singapore Residential Sector – Brisk home sales in March

Developers sold 1,296 private residential units (excluding ECs) in Singapore for the month of Mar.

This represented a strong increase of 96.4% on a YoY basis and was more than double (+100.9% MoM) that of Feb (645 units).

This culminated in total new private home sales of 3,574 units for 3M21, which is an increase of 58.6% YoY and constituted 37.6% of the mid-point of our full-year forecast of 9k to 10k private new home transactions.

One of the key reasons for the brisk sales momentum in Mar, was the successful launch of Midtown Modern, which is a luxury residential project by GuocoLand. This project is well located above the Bugis MRT interchange station.

The robust volume growth momentum in Singapore’s residential market has followed the recent buoyant QoQ price growth of 2.9% seen in 1Q21 (based on URA flash estimates).

This would continue to draw scrutiny from the authorities, in our view, whose main objective is to ensure that residential price growth is kept in-line with economic fundamentals.

That said, we note that Singapore’s real GDP expanded 0.2% YoY in 1Q21, based on advanced estimates. This was a turnaround as compared to the 2.4% contraction registered in 4Q20, and was also above the street’s -0.2% projection. Unemployment rates have also been on the decline for four consecutive months.

We believe the current property market upcycle has been driven largely by genuine homebuyers, especially aspiring HDB upgraders who are purchasing a private home for staying.

Based on current price levels, our preferred Singapore developer is UOL Group (UOL SP), given that it has been lowering its inventory risks and has also been seeking to unlock value for shareholders via redevelopment projects. UOL’s net gearing ratio of 0.29x (as at 31 Dec 2020) is also at a very healthy level.

Source: OCBC

[winston]

CGS-CIMB stays 'overweight' on Singapore property sector after March home sales jump

by Atiqah Mokhtar

Valuations for Singapore developers are still inexpensive, noting that developers are trading at a 45% discount to RNAV, close to one standard-deviation below long-term mean discount.

“We prefer developers with a high recurring cashflow base and a strong balance sheet that would enable them to tap into any opportunities during this slower cycle,” she says.

To that end, her top picks are UOL Group, City Developments and CapitaLand. The counters are all rater ‘add’ with target prices of $7.91, $8.97 and $4.04 respectively.

Source: The Edge

https://www.theedgesingapore.com/capita ... home-sales

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Provisional Tender Results for Land Parcel at Tengah Garden Walk for Executive Condominium Housing Development
https://www.hdb.gov.sg/cs/infoweb/about ... -Tengah-E1


Tender closing for URA sale site at Ang Mo Kio Avenue 1
https://www.ura.gov.sg/-/media/Corporat ... 21-14a.pdf

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PropertyGuru reports net loss of $11.8 mil, sees 7.2% lower revenue of $82.1 mil for FY2020
https://www.theedgesingapore.com/capita ... mil-fy2020