News: Analysts expect project launches to proceed despite the coronavirus outbreak

Feb 5, 2020

Analysts believe residential projects that have been set for launch over the next couple of weeks will likely proceed as planned even as transaction volumes and crowds at showflats could decline amid concerns on the Coronavirus outbreak, reported The Business Times.

“Otherwise, you will have bunching up. Already without the virus, sales have been slow,” explained Alan Cheong, Savills’ executive director (research & consultancy).

However, he expects developers to reduce the number of units to be released for sale at launch.

As to prospective buyers, Cheong reckons that sentiment will be affected, with enthusiasm to visit showflats dampened as developers take precautionary measures like temperature checks.

Marketing trips to China and Hong Kong will likely be put on hold also, affecting the number of foreign buyers at new projects.

With this, sales volume for the primary and resale markets – assuming the outbreak will not be a prolonged one – are expected to fall in the first quarter of 2020.

However, the resale market may perform better, in the event sellers under pressure concede to buyers’ asking prices.

Knight Frank head of research Lee Nai Jia also expects developers to push ahead with their launches, noting the potential risk of the virus spreading further which could lead to weaker sentiment should 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 said.

Sales from Chinese buyers is also expected to slow in the next two weeks to a month, considering the travel curbs put in place by the government.

Christine Li, head of research for Singapore and South-east Asia at Cushman & Wakefield, on the other hand, sees a slight impact on project launches as she expects developers to hold back new launches.

She notes, however, that it is “still early days” as launches usually hit full swing post-Chinese New Year in March.

“Although there is still caution in the market, developers are unlikely to make any drastic change in terms of pipeline launches,” added Li.

High-end luxury projects, which usually see more Chinese buyers, may post slower take-up rates as viewings ease on the back of the outbreak. But Li expects the impact to be contained since Singapore is considered as a safe haven amid global headwinds.

In fact, executive condominium (EC) Parc Canberra managed to attract 5,800 visitors during its weekend launch, revealed Koon Wai Leong, general manager of Hoi Hup Realty, which is developing the project with Sunway Developments.

Parc Canberra Review: Is this the most accessible EC ever launched?

The developers had put in place precautionary measures, such as hand sanitising, mandatory temperature checks, checking of visitors’ travel history and recording of their contract information. They also ramped up the frequency of cleaning at the showflat.

Those who travelled to mainland China in the past two weeks were requested not to visit the project’s showflat.

Another EC, OLA by Anchorvale – a joint venture between Gamuda Land and Evia Real Estate – is set to open its show gallery on 15 February, subject to relevant approvals.

This comes as the developers deemed it safe enough to continue with the show gallery’s launch, said Evia Real Estate managing partner Vincent Ong. And since the 548-unit project is not available to foreigners, “there is a smaller chance of contracting the virus”, he added.

In case the situation worsens, Anchorvale is prepared to roll out videos and online bookings to enable buyers to choose their preferred units.

Meanwhile, Bukit Sembawang Estates eyes to release the final phase of its landed development, Luxus Hills, later this month, while Soilbuild will open its Verticus development for preview on 8 February.

Much like the others, precautionary measures will also be put in place by the two developers at their respective showflats.

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