Property Prices In Singapore Won't Fall! Diu Leh Lo Mo Lah!

[JohnTan]

A land parcel for mixed commercial and residential use in Yishun along Yishun Avenue 4 was put up for sale and received bids as high as $185.09 million for the land which has a 99 year lease.

The Housing Development Board (HDB) explained that the 9,759.8sqare metre land had received 5 bids in total with the highest bid coming from Northern Resi Pte Ltd and Northern Retail Pte Ltd.

HDB has yet to decide who to award the tender to as it still needs to evaluate the bids carefully.

This is the first government land sale exercise of 2015 and totals a cost of about $629 per square foot per plot ratio.

Property analysts Colliers explained that the bids were within expectation especially as Singapore continues to face a “lukewarm” property market.

At this land cost, the companies who bought the land would probably need to sell the land at about $950 to $1000 per square foot, explained Colliers.

For the retail, commercial areas, the gross monthly rents are likely to range from $6 to $12 per square foot depending on the size and type of business the shop spaces are leased to.

If colliers’ predictions are true, the residential areas sold in the latest land sale are not going to be cheap if almost $1000 per square foot is the break-even price.

Do you think you will see affordable properties being built on this land when the bids are so high?

http://therealsingapore.com/content/hdb-land-parcel-yishun-attracts-bids-18509-million-99-year-lease

Developers are still willing to pay top dollar to develop property in Singapore! More good years to come!

 

[Narong Wongwan]

You dare to say that?!
Nanti robert kuok's neighbour aka número uno come in to fuck yiu up for talking up the market...

 

[AhNehs]

Developers are still willing to pay top dollar to develop property in Singapore! More good years to come!

Good good...buy property better.

 

[eErotica69]

Developers are still willing to pay top dollar to develop property in Singapore! More good years to come!

See what I mean by Reverse Psychology?

 

[po2wq]

developers r not daft in terms of making moni ... u haf 10m population 2 haus in sinkielan ...

 

[Seee3]

When developer has used up their land bank and are not making money in their last few projects which are nearing completion, they will die immediadiately when those projects are completed i.e. loan repayment and cash flow problems.

A common practice is to tender for more land knowing that it might lose even more money. They do it so that if they are successful, they can get more loans and use it to tie over current cash flow problem.

They rather die later and enjoy the good life with the new loan then die immediately. Either ways is dead so might as well extend the enjoyment for as long as possible.

 

[SgGoneWrong]

When developer has used up their land bank and are not making money in their last few projects which are nearing completion, they will die immediadiately when those projects are completed i.e. loan repayment and cash flow problems.

A common practice is to tender for more land knowing that it might lose even more money. They do it so that if they are successful, they can get more loans and use it to tie over current cash flow problem.

They rather die later and enjoy the good life with the new loan then die immediately. Either ways is dead so might as well extend the enjoyment for as long as possible.

Based on what you said, i google searched northern resi and retail pte ltd to see what they have built so far but can't find these companies online.

 

[Seee3]

Based on what you said, i google searched northern resi and retail pte ltd to see what they have built so far but can't find these companies online.

Most probably new subsidiaries or new venture conglomerate with or without some foreign partners. Behind them usually some old name.

 

[SgGoneWrong]

Most probably new subsidiaries or new venture conglomerate with or without some foreign partners. Behind them usually some old name.

If it's subsidaries and they collapse, the parent companies will not be responsible for its debts?

 

[mojito]

Limited or non recourse. Banks may change terms, ask for additional collaterals regardless. Hard to say.

 

[Seee3]

If it's subsidaries and they collapse, the parent companies will not be responsible for its debts?

Technically yes, parent companies will not be responsible. However, like what Mojito has highlighted, bank will ask for collateral and usually the parent will need to use their assets. So it depends on the deal. Banks cannot give unsecured huge loans.

This is a common practice when properties are not selling well. Developer when stuck with unsold units but yet need cash flow for loan repayment and others will try to secure more loan to resolve the immediate problem. Bank is fully aware and would oblige as long as loan is legitimate. Otherwise, if developer cannot get new loan and default on existing ones, bank must take action and face bad debt problem immediately. Such arrangement buys time for the developer. If subsequently, the market does pick up and the unsold units are disposed, then everything will be fine. If not then everybody die.

 

[SgGoneWrong]

Thanks Seee3 & Mojito