Residential: Sales momentum gaining in the mass and mid market segments

According to The Business Times, GuocoLand sold around 160 units at the relaunch of its 625-unit 99-year leasehold The Quartz project located next to Buangkok MRT last week. The 160 units were sold at an ASP of S$595 psf, 10% below ASP of S$ 650 psf fetched at the peak in the middle of 2007. The bulk of the units sold were three bedroom appartments with an average size of 1,100 sqf costing around S$650,000. Locals living in the vicinity formed the majority of the buyers accounting for nearly 80% of purchases. Majority of these buyers were HDB upgraders. Besides the attractive pricing, design, layout and the near MRT location, the nearing project completion drove demand for the project.

We view the selling prices for The Quartz as a good data point supporting base formation for the mass market adding to the gaining sales momentum in the mass and mid market segments. Supported by the successful launches of Caspian and Alexis projects developers have sold more than 1000 units this month alone which is nearly a quarter of the full year developer sales last year. More such transactions would help in restoring the homebuying sentiment and could potentially act as a re-rating catalyst for the sector.

Units Sold in Feb for selected projects (best view with Firefox, IE may run into over length)

------+------------+---------------+--------+---------+-----------
Region  Project      Location     Units   Avg psf  Remarks  
                                   sold    (S$)             
------+------------+---------------+--------+---------+-----------
Mass  The Quartz  Near Buangkok    160      595   10% below 
                  MRT                             S$650 peak
                                                  in mid 07 
------+------------+---------------+--------+---------+-----------
Mass  Caspian     Next to          515      600   Comparable
                  Lakeside MRT                    LakeHolmz 
------+------------+---------------+--------+---------+-----------
Mid   Alexis      Near QueensTown  293   850-1100 Comparable
                  MRT                             Anchorage 
                                                  S$891 psf 
------+------------+---------------+--------+---------+-----------
Mid   D'Chateau   Bukit Timah       18   1000-110020% below 
      Shelford                                    Sep 2008  
                                                  launch    
                                                  S$1,350   
------+------------+---------------+--------+---------+-----------
High  RV Suites   River Valley      48     1300   15% below 
                                                  S$1600 psf
                                                  for Wharf 
                                                  Residences
------+------------+---------------+--------+---------+-----------

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