Developers likely to proceed with launches amid virus outbreak

Developers likely to proceed with launches amid virus outbreak

RESIDENTIAL projects slated for launch in the next couple of weeks appear likely to go ahead as planned for now. However, visitorship to showflats and transaction volumes could decrease amid concerns about the coronavirus outbreak, analysts say.

Alan Cheong, Savills' executive director (research & consultancy), expects developers to continue to launch as planned. "Otherwise, you will have bunching up. Already without the virus, sales have been slow," he points out. However, he reckons that developers could scale down the size of the launch by reducing the number of units released for sale.

Where prospective buyers are concerned, sentiment is likely to be affected, with dampened enthusiasm to visit showflats as developers put in place precautionary measures such as temperature checks, he adds.

In the first quarter of this year - assuming the outbreak is not a protracted one - Mr Cheong expects sales volumes for units in both the primary and resale markets to fall. Developers will put marketing trips to China and possibly Hong Kong on hold for now, which will affect the number of overseas nationals buying properties at new projects here, he says.

However, he believes the resale market may do better than the primary market in relative terms, if sellers under pressure cede to buyers' asking prices.

Lee Nai Jia, head of research at Knight Frank, also expects developers to proceed with property launches, pointing out that there is the possible risk of the virus spreading further and sentiment deteriorating if they wait.

"In view of what is going on, visitorship to showflats will come down, unless the project is very attractive in terms of attributes such as location," he says. Given the travel curbs that Singapore has put in place, sales from Chinese buyers will be slower over the next two weeks to a month, he adds.

Dr Lee reckons that the number of units sold in the primary market in the first quarter will decrease, but that the resale market might be more impacted should worried private home-owners decide to cut back viewings and hit pause on the sales process until things stabilise.

Christine Li, Cushman & Wakefield's head of research (Singapore and South-east Asia), says there could be a slight impact on project launches as developers are likely to hold back new launches. However, she notes that it is "still early days" with launches normally only hitting full swing post-Chinese New Year in March.

She adds: "Although there is still caution in the market, developers are unlikely to make any drastic change in terms of pipeline launches."

In particular, high-end luxury properties which might typically see more Chinese buyers could face slower take-up rates as viewings ease amid the outbreak, Ms Li highlights, adding that the impact is still likely to be contained since Singapore is perceived as a safe haven amid global headwinds.

Executive condominium (EC) Parc Canberra, which launched its sales gallery last Friday, still managed to bring in the crowds. The project by Hoi Hup Realty and Sunway Developments saw 5,800 visitors over the weekend, according to general manager of Hoi Hup Realty, Koon Wai Leong.

The two developers also put in place precautions at the showflat, such as mandatory temperature checks, hand sanitising, recording of contact information of all visitors as well as checking their travel history. Those who had travelled to mainland China in the last two weeks were requested not to visit the showflat. In addition, the developers ramped up the frequency of cleaning at the premises.

Another EC, OLA, is poised to open its show gallery to the public on Feb 15, subject to the necessary approvals. The 548-unit EC is being developed by Anchorvale, a joint venture between Evia Real Estate and Gamuda Land.

Vincent Ong, managing partner of Evia Real Estate, says the developers have assessed the situation and deemed it safe enough to continue with the launch of the show gallery. Pointing out that ECs are not available to foreigners, he adds: "Given the more localised pool, there is a smaller chance of contracting the virus."

Still, there will be precautions in place, such as sanitisers, temperature screening and checking of travel history. Visitors who clear the checks will be identified by stickers and will go through the sales gallery via a designated route, so as not to mix with those who have not been cleared.

Anchorvale says it is prepared to roll out online booking and videos to enable buyers to select units in the event the situation worsens.

And Bukit Sembawang Estates plans to release the final phase of its 999-year landed development, Luxus Hills, later this month. A spokesperson says: "We have plans to proceed with the launch in end-February and will put in place a range of precautionary measures to safeguard the well-being of our staff, agents and visitors."

Soilbuild is also proceeding with a preview of its development Verticus on Feb 8. A spokeswoman says: "As the situation remains fluid, we are actively monitoring and will respond accordingly." Like the other developers, it will also take the necessary precautionary measures at the showflat.

Where pricing is concerned, Cushman & Wakefield's Ms Li says developers are unlikely to cut prices, given that some are already working with thinner margins and also still have some breathing room before ABSD deadlines hit. She adds: "In fact, some of the existing launches could even realign their pricing with competitors' in the vicinity."

Source from The Business Times 5 Feb 2020