The pick-up in high-end transactions despite the slowdown in overall sales volumes should benefit high-end developers such as SC Global, Ho Bee, Wheelock Properties and Wing Tai. Maintain OVERWEIGHT. By UOB Kay Hian

The Urban Redevelopment Authority (URA) released the monthly developer sales statistics data for October in which the number of units launched for the month decreased by 59.9% mom to 566 units while the number of units sold decreased by a relatively smaller 29% mom to 811 units.

Sales slow down on lack of new project launches
Although the sales volumes slowed down for the third straight month to 811units (-29% mom) during October, the transactions are quite healthy on a year-on-year (yoy) basis, 7x the units sold during Oct 08 and 1.4x times that of Oct 07.The overall take-up rate for the month stood at 143%, indicating that one possible reason for the slowdown could be due to the lack of new launches, especially in the mass market segment. We believe the reason for the lack of new launches could be due to the developers waiting on the sidelines to assess the impact of recent government measures and also on their plans to tie up their launches with the opening of the integrated resorts. The overall sales volume for the year now stands at 13,903 units, just 908 units short of the record 14,811 units sold during 2007.

High-end segment gains traction
The high-end segment witnessed the highest sales during the month of 311units (+104.6% mom) representing 38.3% of the total transactions during the month. The transactions above S$1,500 per sq ft (psf) doubled in October to 296 units (+244% month-on-month), in spite of the total transactions falling during the month. The prices in this segment for some projects also moved up by 2-5%. Cyan located at Bukit Timah Road was the top pick among the buyers selling 81 of the 90 units launched at an Average Selling Price (ASP) of S$1,800 psf. Boulevard Vue located at Cuscaden Walk managed to sell a unit at highest level of S$4,150 psf.

Mass and mid-tier segments take a breather
Sales volumes slowed down in the mass and mid-tier segments to 251 units (-55.2% mom) and 249 units (-42.2% mom) during October due to lack of new launches in these segments. City Lott the only project to be launched in the mid-tier segment sold its entire 40 units at a median price of S$1,181psf. Price levels of the projects in these segments remained steady during October.

Recommendations
The pick-up in the high-end transactions despite the slowdown in the overall volumes should benefit high-end developers SC Global, Ho Bee, Wheelock Properties and Wing Tai. We remain positive over the mid- to long-term recovery in the property market.

Disclaimer
We have based this document on information obtained from sources we believe to be reliable, but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Expressions of opinion contained herein are those of UOB Kay Hian Research Pte Ltd only and are subject to change without notice. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of the addressee only and is not to be taken as substitution for the exercise of judgment by the addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any securities.

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High-end gains traction despite slowdown in overall sales
The pick-up in high-end transactions despite the slowdown in overall sales volumes should benefit high-end developers such as SC Global, Ho Bee, Wheelock Properties and Wing Tai. Maintain OVERWEIGHT. By UOB Kay Hian

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