Sunday, August 17, 2008

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City Developments Q2 Profit 15% drop

City Developments posted a 15 percent fall in net profit for Q2 2008 as property sales slumped in the first half of this year.

City Developments, 37 percent-owned by the family of property tycoon Kwek Leng Beng, earned S$165.2 million ($117.6 million) in the April-June period, down from S$194.4 million reported a year ago.

The company chief Kwek Leng Beng said it may raise Islamic debt as part of a S$1 billion Islamic multi-currency notes programme. He has repeatedly said that the property market is still strong and that City Developments is in a good position to hold back launches until the completion of first integrated resorts next year when he expected sentiment to improve. Kwek Leng Beng also acknowledged that there have been some cases of high-end property buyers resorting to panic-selling in the secondary market. These are people who'd bought their units during the early stages of the property boom

Forumers' comments:
"After CDL chief speak up making a statement...............'UBS analysts downgraded CDL shares ...The louder Kwek Leng Beng shouts that property is still healthy and it is a good time to buy.............M Stanley analysts down graded CDL shares again to the lower and lower and recommend 'to sell' CDL sharesCould he just bites his tounge?......we are holding a lot of CDL shares when we bought it at the peak.............we are now losing $ millions and $ millions.He talks like he is bigger/ richer than Warren Buffett who has $ billlions and $ billions."

"The more the CDL Chief talks, the more his share falls ...."

"It is true as Kwek Leng Beng said property slowdown not widespread. Look at the newspaper, majority of the 3rm HDB flats are asking or transacted at above $300k , by the way why it happened now if the market is so bad. HDB flats are still moving or selling well till now. I do agree that some desperate sellers are like some readers very panic thinking the market will collapse. Construction material costs are higher now due to many construction sites in Singapore. Many expats are coming into Singapore to work too. Foreign investors like Singaporeans are wait & see situation. All buyers are waiting to get good buy. They are waiting for sellers who cannot hold on well or start to panic. By the way, this is Life!"

"Your thought are rather shallow I must say. All this crap by the media and property agents/developers are not worth reading. I have stayed in a lot of countries and I am always shocked on how preoccupied an average singaporean is about properties compared to overseas people. It is unhealthy and is the same as a gambling mentality. Worse when info is tightly skewed and biased. Property in Singapore for the last 15 years since the 1990s is actually nothing shot of gambling and hype. Period. The only people to benefit are the developers, banks and agents. A lot of people has short memories and are prone to gambling. In 1998/7 and 2003/4, I know of numerous cases of people who fell into the trap of believing all the crap, being irrationally optimistics , told Singapore's would be switzerland of the east, blah, etc and commit huge mortgages thinking everything is always going up(same mantra last 2 years) . Suddenly when it collapsed, they cannot pay the huge mortgages when the economy goes bad suddenly (literally over a few months) the banks would repo their homes . However now in the 2000s, information is widely available and instantaneous and easily verified. World economy is going down and tis is possibly the worst recession in 100 years!!! Read the internet and use common sense. It is like gravity. at the end of the day, logic always prevails , that's why banks always win. Worse come, they just repo your homes and foreclosed it, collect the interests, ask you to top up for negative equity, etc.Your pay is not going to go up by much and like in US inflation is going to hit us hard. in my opinion, A lot of what happened to US and Europe is going to happen in Singapore. Worse when you see how much people committed to such gambles. on average a person in US/Europe commits 30% of their salary to their mortgage. But in Singapore it is like 70-80%!!!! of your salary. That's why when even MRT increase their fares by 10 cents or petrol goes up by a few cents a lot of people protests. Which means they have difficulty making ends meet with their budget. So disposable income is going to go down as costs of living is going to go up. Less money available for cars and property, hence cars COEs is getting cheaper(if they have an equivalent property like COEs it is going to be the same!!!!). When agents/developers are always going to the press everyday to tell you to commit, you know something's not right."

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

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