The strong response for two recent Singapore property projects has reaffirmed the positive outlook for the city-state’s residential developers, Deutsche Bank said in a note on Tuesday.
“The likely acceleration of launches into the second and third quarters following a prolonged absence of developer launches, coupled with the en-bloc payouts, poses further upside to our current ASP (average selling price) growth assumption of 10 percent for 2018,” Deutsche Bank said. “In fact, the current launch price for some of the projects has already shown more than 10 percent increase in price.”
The bank estimated more than 29,000 units would come to market over the next 24 months, compared with annual sales of 15,000-22,000 units during past upcycles.
“While we believe that the supply-demand balance is likely to be maintained despite the increase in supply, there will be a significant advantage for first movers especially given a prolonged break in the primary market,” Deutsche Bank said.
It tipped its top property picks as City Developments, with S$16.00 target, UOL, with S$10.00 target, OUE, with S$3.00 target, and CapitaLand Commercial Trust. All four are rated Buy. CCT’s target wasn’t provided.