Property: new home sales in May -12.7% MoM to 1,575 units (-4.8% if including ECs). This is on the back of 41% decline in number of units launched to 1,215 units. However sales are still +45% yoy and Deutsche notes annualized sales of 13k units are above the 5-yr avg of 12.2k...
Mass market sales still dominated, and take-up for new launches remained strong and skewed towards small units. High-end sales were sluggish barring the new record price of $5.8k psf for a unit in The Marq. Jones Lang LaSalle notes that marginal or fringe buyers could move back to public housing given current conditions and Colliers believes buyers will be more selective and cautious, possibly waiting for clearer policy direction before acting...
Deutsche notes sector trades at 32% discount and policy uncertainty has likely been priced in. Believes moderating sales could ease risk of further tightening measures. Sees future intervention targeted at enhancing public housing affordability, dampening the low-end private market but also possibly signaling the end of the tightening cycle...
Deutsche's top picks are Keppel Land (closed at 52-wk low) and Capitaland (closed 3cts off 52wk low) after recent underperformance. Stocks trade at 1.22X and 0.88X P/B respectively.
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