- New residential sales (excluding ECs)  fell 19% MoM to 1,371 units for the month of June 2012. It was the second consecutive monthly decline of new home sales. For 1HCY12, total sales tally hit 12,238 units, 68% of our full year estimate for 2012F.

- Unchanged from previous months, sales composition remained lopsided in favor of mass market residences. Excluding ECs, 81% of total sales (an increase of 10% MoM) came from Outside Central Region (OCR). We noted that as the price gap between mass market homes and ECs widen, demand for the latter has caught up. Comparing YoY, ECs sold for 1HCY12 averaged 409 units per month, double over the same period last year. We think that as  prices of mass market homes border S$1,000 psf, a substantial price gap of 30% over ECs will sway eligible EC homebuyers away from private residences. Sales in Rest of Central Region (RCR) slumped to 9% (21% in May 2012) whilst Core Central Region (CCR) stood  out  at  10%  (was  8%  previously).  It  was  attributable to the launch of two boutique development consisting of small units boosting a'ordability.

- Notable projects launched in June 2012 were 75'unit 1919 (Aurum Land) ' 74 units sold (99% take'up rate at ASP of S$2,042 psf), 610'unit River Isles (Qingjian Realty)  ' 263 units sold (60% of launched units at S$835 psf), 376'unit Sea Esta (Hoi Hup Sunway) ' 255 units sold (68% take'up rate at S$906 psf) and 416'unit Watercolours (EC) ' 201 units sold (48% take'up rate at S$735 psf).

- Luxurious unit (sales exceeding S$3,000 psf) sales slumped 40% MoM to six units in June 2012. Two units were sold at 28'unit Boulevard Vue (Far East) at S$4,130 psf, one unit sold at 1,129'unit Re'ections at Keppel Bay (Keppel Group) at S$3,198 psf, another unit sold at 338'unit Scotts Square (Wheelock) at S$4,803 psf, one unit sold at 229'unit The Laurels (Sing Holdings) at S$3,029 psf and one unit sold at 231'unit The Scotts Tower (Far East) at S$3,382 psf. With the 10% ABSD hanging over foreign purchases, luxurious sales is likely to remain tepid, in our opinion.

- Comparing MoM ASP of sizable projects, price movement remain subdued. Of the random list of twenty'nine notable projects, only fourteen experienced price hike MoM over May 2012.

- According to a media report, 46% of Singaporean homebuyers had committed to a property within S$0.5'1mil in 1H2012. It was drastically higher than 26% in 1H2010 and 40% in 1H2011. We believe it signals the emergence of marginal buyers in the property cycle. HDB  'at dwellers had been able to tap on high cash over valuation in order to upgrade or commit to a second property. We think that the above may be detrimental for the property market as the government will be concerned about a spike in defaults arising from a crisis. We maintain our view that policy overhang will remain a dampener on property sales in 2HFY12F.

- Amidst our coverage, we advocate investors to switch to SingLand (S$9.60, BUY) for its sharp  discount to our RNAV estimates and built'up of residential landbank

Source: AmFraser