The Ascentia Sky official launch on Saturday saw sizeable turnout of ~ 200+ people, with the makeshift carpark more than 75% filled at any one point. Buyer profile was mainly Singaporeans from late 20s to early 50s. We believe the project is one of the first (if not the first) to have showflats of all available sizes, which offer customers a good feel of what they are buying into. ~ 20 units were sold on Saturday, putting the total transacted units at 55, which translate to a 50.5% take-up out of the 109 launched units (11 storeys only). More units were launched on Sunday, with total transacted units YTD at 69. We hear this excludes some units which Wing Tai could have sold to its business associates and/or directors. Most units sold were 2-bedders, reflecting that more buyers bought it for investment purposes. Buyers also preferred the tower facing the Tanglin / Orchard Road as compared to the Sentosa view. Transacted prices ranged from S$1,100 to 1,300 psf. Despite the slight premium over neighbouring projects, the healthy take-up suggests buyers see untapped potential due to Ascentia Sky unique design of multiple sky gardens, brand-name developer status and stellar location (3-min drive to Orchard Road and 8-min train ride to CBD). Further, our analysis revealed that during the last property upcycle, projects could yield diverse capital values despite their close proximity, i.e. Tanglin View S$1,261 psf vs. Tanglin Regency S$998 psf. For comparison and insights into its view, prospective buyers were seen visiting The Metropolitan nearby.
In the mid-market segment, Vista Residences, a district 12 project by Far East Organisation, had also seen strong take-up for the initial units launched. Our check with property agents suggest that local buyers are still driving the demand for private properties but there is a rising proportion of buyers who are buying properties for investments rather than for own stay. At Vista Residences, we understand that prices start from ~S$1,050 psf onwards and 90% of the initial release of the units up to the 12th storey had been taken up during the private preview, with more floors subsequently released for sale.In comparison to The Arte, a development by City Developments that sits next to Vista Residences, which was launched at an average price of S$880 psf, it seems that prices have risen sharply in recent months but in fact, the difference in pricing is attributable to the difference in unit sizes and floor plans. Vista Residences offer smaller size units that command higher psf pricing and also smaller balcony space than The Arte. As such, we caution that the strong buying momentum at higher psf pricing for the new launch should not be viewed as a new uptrend for property prices.
Mass market projects that are expected to be launched in the coming weeks include Oasis @ Elias (a 388-unit, 99-yr LH project at Elias Road by Chip Eng Seng) and The Gale (a 329-unit, freehold project at Flora Road by Tripartite Developers). A price increase that is actually not a true increase.
Too early to call for a recovery. We remain unconvinced by the recent 'recovery' in the physical property market as we believe that the buying strength over the recent weeks could have been driven by the spillover effect from the earlier pent-up demand that had drawn cash-rich local investors back into the property market. In our view, potential catalyst for price increase will have to come from the inflow of foreign funds into the property market as well as a pick up in employment opportunities. Foreign funds had been the driving force of the property boom in 2007 and we have not yet seen them coming back in a strong way. As such, we think that it may be still early to call for a recovery in the property market.
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