+ Resale bucked the trend. Despite the 28% YoY drop to 3,961 in total private resale volumes in 3Q22, PropNex managed to grow revenue by 11% to S$785mn. Reasons for the market share gains include the growth in the sales force and deliberate efforts to focus on resale. The price difference and lack of available units between new launches and resale helped stimulate resale volumes.
– New launches are still a drag. Revenue from project marketing declined 12% YoY to S$88mn. The dearth of new launches and inventory has been a drag to revenue. New units transacted in Singapore (excluding EC) are down 38% to 2,187 units in 3Q22. With a balloting process, market share will also be determined by random chance.
After two cooling measures and higher interest rates, we do expect some softening in buying interest from euphoric levels. Nevertheless, we remain upbeat that the key drivers supporting selling prices and demand are intact, namely rising residential population, low unemployment rates, new household formations (e.g. 25k marriages), rising land and construction cost, attractive HDB grants, low inventory level (1.5 years vs 3 year average) and return of foreign buyers. On the transaction volumes, the rebound in new launches for FY23 will support project market sales.