Thursday, November 6, 2008

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Impact of Singapore Government's Land Sales Halt

The Singapore government recent announcement to halt land sales in view of the plunging sales of private property market bring to mind the same measure that was carried out during the 97-Asian Financial Crisis. The following is a forum-exchange on the impact of the measure extracted from the Singapore Property Forum:

"我 已 經 說 過 , 那 股已 經 上 岸 的 心 態 使 到 自 己 已 無 當年 之 勇 , 更 何 況 金 融 海 嘯 的 確 是 生 平 所 未 見 , 多 年來 幸 運 地 賺 到 一 些 錢 , 目 前 想 買樓 的 念 頭 可 能 強 過 買 股 票 , 仍 打 不 定 主 意 。 樓 價 只要 特 區 政 府 堅 守 「 勾 地 」 政 策 ,土 地 供 應 有 限 , 價 格 不 可 能 大 跌 。
買樓 與 買 股 最 大 的 分 別 是 : 股 價 波 幅 太 大 , 影 響 心 理 健 康 , 樓 價 只 要 能 夠 做 到 毋 須樓按 , 則 不 會 有 甚 麼 壓 力 。 買 樓 收 租 是 我 將 來 的 退 休 大 計 , 兩 千 年 來 , 中 國 的 地 方鄉紳 就 是 靠 買 地 收 租 當 地 主 而 一 代 傳 一 代 , 這 是 最 簡 單 的 保 護 財 富 方 法 。"

"He is right.
As long as Govt stop selling land, cut out the supply in near future, property price wil be sustainable.
Demand will still be there, new family, marriage, FT, immigrants, 6.5M population, Sporean back from US & Europe......
Market just waiting for signal to up again."

"govt also stop land sales during the 97-Asian financial crisis but private property price plunged neverthelessly by 40%-50% by developers and in some cases, 70% by sellers ... when the govt acts, it's usually because they already see the crash!!!
in fact, in the 97-crisis, the overhanging supply is only half of what we see today .. it took more than 10 years for property price to recover .."

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase


Anonymous said...

There is no lack of land availibility to developers. They are already sitting on large land banks. Any effect of limited supply on prices is due purely to developers themselves holding back launches because of poor sentiment, and not because they can't afford to buy land to build. Hence the recent move to put a reserve price on the land sales will have no impact whatsoever on launches.

In fact, if I were a developer and the government were to make available cheap land, I would JUMP
at the oppurtunity to boost my land bank, and widen my profit margin by acquiring cheap land.

Hence, its a red-herring to suggest that putting a reserve price on land somehow indicates government wants to prop up the property market.

Government's motivation is to protect themselves from oppurtunistic bids from developers who HOPE to get land cheap. (the savings would not be passed on to home buyers anyway, they'd simply dissapear into the developer's coffers)


Anonymous said...

Agree with you absolutely!

Anonymous said...

it is obvious that the government suspension of land sales recently will benefit the rich and powerful developers as well as private individuals with private property interests. Look at the balance sheets of some of the developers, they have hundred of millions and billions of cash as well as the richest billionaaires and millionaires in Singapore in property arena. The annoucements was met with great jubilations amongst the property developers, agents and speculators. In good times, they reaped significant profits and gains and in bad times, the government should not subsidize them. Yet we see that the government is making it a WIN Win Win game for them and they always come on top at the expense of Singaporeans and genuine buyers who have to be contended with high mortgages in their lives or buying overpriced properties. The Singapore government should stop helping the developers and speculators and make singapore competitive. many businesses are complaining of escalating rentals and property prices. The property developers and speculators have many good times sitting on hoard of cash and capital gains even now when they sell. we sincerely appeal to the government to leave land prices to market condition and not artifically hold up the market to help the property speculators and property developers. they have too much good times.more Singaporeans will leave this place as only the rich Singaporeans, wealthy foreigners and FTs will stay put in Singapore. The rest must be contended to live in hdb, work until 60s or 70s till you drop dead. OR you can pack up and go to elsewhere and branded as quitters.

Anonymous said...

Why is the government supporting the property developers. Singaporeans should not forget that :
1. the property developers only want to drum up property prices and profiteering by taking advantage of the IRs,Marine Financial Centers, Sport hubs, F1, population growth, influx foreigners and global city in the world, e.t.c.
2. taking advantage of situation by asking buyers to pay for area space on bay window and balconies when they do not to the government.
3. building private blocks so close to each other to maximize space. Just look at some condominium projects, you can see each other apartments with no privacy
4 building houses in strate landed development and condominium units projects and packed them almost like sardines, very close together to maximize the number of units worsening the living environment and market them aggressively for sale
5 employing an army of agents to aggressively market them during new launches and always telling you that developer will increase prices, etc to push unwary buyers or that the costs of construction is going higher and higher

The list go on and on. Motive: to push private prices higher and profiteering. Now they expect the Government to help them in a downturn or when existing speculators/developers can still make capital gains from units bought one or two years ago.
They made substantial profits in good times and sitting on pile of cash and land with no problems even a recession set in. Now the government seem to be taking pro-active measures to help developers and they even want the government to reinstate the deferred payment schemes.

No reasons for the government to support them as they are indulging in unproductive, speculative activities and hoarding cash and land only making the country uncompetitive. Our government should concentrate or divert from overdependence on the property and construction sectors and focus in developing more high tech exports and innovative products and services than property property property。

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