Buying momentum continued in March. After a month of strong property sales in February, developers' sales remained firm in March. According to URA data, a total of 1,162 non-landed property (NLP) units were sold in March. Breaking down by per square foot pricing of these projects, 1,017 NLP sold units (~87.5% of total units sold) were priced at S$1,000 psf and below, implying that mass market properties continue to dominate sales.

136 NLP sold units were priced between S$1,001 psf and S$1,500 psf and only 9 NLP sold units were priced above S$1,500 psf. Although the number of NLP units launched declined MoM to 823 in March (1,059 units in Feb), more new projects were launched in March (8 projects in March vs. 4 projects in Feb). The decline in the number of NLP units launched could be due to developers holding back units in their new launches and this is a positive move to control the supply of new units in the market. Some of the major launches in March included Double Bay Residences (320 units launched), Mi Casa (123 units) and The Arte (120 units).

Weak macro newsflow continues. The recent rally in the stock market could have provided an additional boost to buying sentiment in the propertymarket. However, economic data remains weak as Singapore had just reported a record GDP contraction of 19.7% QoQ in 1Q09. On the jobs front, we continue to see negative newsflow on retrenchments coming from the finance and manufacturing sectors. While we doubt the sustainability of the current demand for properties, we reckon that the current situation provides a good opportunity for developers to lighten up their landbank and capture new sales to extend their earnings visibility, after enduring months of slow sales earlier.

New sales for UOL and CDL in March. Among the developers under our coverage, UOL Group and City Developments (CDL) have benefited the most from the improvement in buying sentiments. UOL Group's Double Bay Residences sold 264 units out of the total 646 units (41% sold) and CDL's The Arte sold 90 units out of the total 336 units (26.8% sold). As the construction for The Arte had already started last year, CDL will recognize a higher percentage of revenue upon sales, based on the % of completion of the project. We have BUY rating for UOL Group (FV: S$2.58) and HOLD for CDL (FV: S$5.53).