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Thread: A case of if you cannot beat them, join them?

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    Default A case of if you cannot beat them, join them?

    http://www.todayonline.com/Business/...em,-join-them?

    A case of if you cannot beat them, join them?

    by Colin Tan

    Updated 01:40 PM Mar 04, 2011


    Many had expected strong interest and a good fight for a prime private housing site in Bishan when the tender closed last week. Nevertheless, the result still surprised many or should I say "shocked" them - and in more ways than one - when it was announced late on Thursday.

    The first surprise was the highest bid submitted: S$550 million or S$869 per sq ft per plot ratio (psf ppr) for the 129,136 sq ft 99-year state plot. The second was that it was about 27 per cent higher than the second-placed bid and a whopping 2.9 times the minimum bid of S$189,831,390 - or what the Chief Valuer must have deemed as fair market value or at least not too far from it.

    The last surprise was that the top bid came from CapitaLand, who had on a number of occasions highlighted the speculative chasing for land in earlier tenders. Instead of incurring the risk of overpaying for sites through "blind tenders" for government land sales, the developer had indicated that it preferred private treaty negotiations for collective sales.

    Is this a case of "if you can't beat them, join them?" Or did it reflect the special interest of the developer in the surrounding area as it could create synergy with the Junction 8 mall, which is owned and operated by its unit CapitaMall Trust as suggested by one?

    In any case, the Bishan bid was consistent with the record price of S$1.2 billion or S$753 psf ppr submitted for a 30ha mixed-use site in Punggol a week earlier.

    The total value of all 19 bids for the Bishan site came up to slightly over S$6.5 billion, reaffirming once more the fact that the market is heavily laden with liquidity. My opinion has always been that with the huge amount of liquidity in the market, hugely profitable developers, of which they are now many, have no choice but to bid higher and higher, just to secure sites.

    And if a developer has no choice but to "overpay" for a site, it is immensely preferable to overpay for a choice plot than for one in a run-of-the-mill location.

    One alternative would be for developers to venture abroad to do overseas projects that have their own and not necessarily lower risks - which some have already done. Another would be to return the monies back to shareholders and wait for saner prices. However, this would defeat their own raison d'être.

    I am not sure which developer triggered the site but the timing was notable as it came soon after the fourth round of cooling measures (CM4). After conducting its own impact assessment, it must have felt that it could get the choice site for a steal given that market sentiment had been severely battered by CM4.

    If CapitaLand felt a tinge of disappointment that it could have gotten the site by a much lower margin than the 27 per cent it achieved, it probably felt vindicated when the National University of Singapore released its Singapore Residential Price Index (SRPI) this week that showed prices for high-rise private properties rising by a searing 2.6 per cent in January. This growth rate is equivalent to over 30 per cent per annum in case you are still not sure whether prices are rising quickly or not.

    Of course, like many, you may say that the January results were mainly based on purchases concluded before the effective date of Jan 14 for the latest set of cooling measures.

    However, as the weeks roll by, one cannot help but feel that CM4 has been more limited in its impact than CM3. It was the first time that showflats stayed open, allowing us to immediately gauge market sentiment.

    Short of a buying ban, the sharp hike in sellers' stamp duties was interference on a scale never seen in other parts of the world before - in the decisions of investors to buy and sell. However effective it was in eliminating those in the market for a quick gain, it appears, for now at least, to have limited overall impact.

    By now, the market must be shorn of almost all speculators and short-term investors. What is left is what many are describing as genuine long-term investors. If the buying continues and prices continue to rise, many would probably ask: Is this long-term buying considered a problem?



    Colin Tan is head, Research & Consultancy at Chesterton Suntec International.

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    What is he trying to say? These guys should just learn to speak simply and coherently. Or maybe he just doesn't want to predict anymore because he is always so wrong?

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    The problem is that he is trying to rojak on all points of view... nice try but still a confusing article & an open-ended "defensive" opinion

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    one of the most crappiest writer?

    pian jiat?

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    Analyst being analyst, base their assessment on previous data. However, what is happening now is unprecedented.

    Safest thing to do is to list out the present findings, and let the reader draw their own conclusion. A bit weak but what to do... if give wrong analysis will lao kui if turned out wrong...

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    best is don listen to analyst. they talk only. whether price up or down, no impact for them. buyer is the one suffer if they listen to analyst and thing turn out bad. fortune teller can do a better job!!!

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    actually, if u had *really*followed all these market talks, you will realize Colin Tan is one of the very few "analysts" that are bearish. He had been talking down all this while.

    now even he is changing his tone

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    Quote Originally Posted by amk
    actually, if u had *really*followed all these market talks, you will realize Colin Tan is one of the very few "analysts" that are bearish. He had been talking down all this while.

    now even he is changing his tone
    so that's what he means by
    A case of if you cannot beat them, join them?

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    http://forums.delphiforums.com/3in1k...es?msg=45319.1


    Mar 3, 2011

    Practise restraint when bidding for land



    DEVELOPERS should be more responsible when bidding for land, especially if they are government-linked companies like CapitaLand ('19 bids for Bishan site, top offer $550m'; Feb 25).


    High land bids, such as the $550 million winning bid for the Bishan plot, can only lead to inflation in the property market. At about $118 million more than the second highest bid, it translates into nearly an additional $197,000 that each buyer of the 600-unit project may have to bear.


    CapitaLand's bid goes against the Government's aim for reasonable property prices.

    I hope such outsized bidding does not result in more cooling measures that affect genuine home buyers.


    Adam Reutens-Tan

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    Quote Originally Posted by wenqing
    http://forums.delphiforums.com/3in1k...es?msg=45319.1


    Mar 3, 2011

    Practise restraint when bidding for land



    DEVELOPERS should be more responsible when bidding for land, especially if they are government-linked companies like CapitaLand ('19 bids for Bishan site, top offer $550m'; Feb 25).


    High land bids, such as the $550 million winning bid for the Bishan plot, can only lead to inflation in the property market. At about $118 million more than the second highest bid, it translates into nearly an additional $197,000 that each buyer of the 600-unit project may have to bear.


    CapitaLand's bid goes against the Government's aim for reasonable property prices.

    I hope such outsized bidding does not result in more cooling measures that affect genuine home buyers.


    Adam Reutens-Tan
    is somebody putting a gun at the buyers' heads?
    Willing seller willing buyer.

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    Quote Originally Posted by hopeful
    is somebody putting a gun at the buyers' heads?
    Willing seller willing buyer.

    Ask the guy Adam who wrote to ST.

    He thinks it is a government conspiracy to artificially raise bid price for revenue and hence selling price.


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    Quote Originally Posted by wenqing
    http://forums.delphiforums.com/3in1k...es?msg=45319.1


    Mar 3, 2011

    Practise restraint when bidding for land



    DEVELOPERS should be more responsible when bidding for land, especially if they are government-linked companies like CapitaLand ('19 bids for Bishan site, top offer $550m'; Feb 25).


    High land bids, such as the $550 million winning bid for the Bishan plot, can only lead to inflation in the property market. At about $118 million more than the second highest bid, it translates into nearly an additional $197,000 that each buyer of the 600-unit project may have to bear.


    CapitaLand's bid goes against the Government's aim for reasonable property prices.

    I hope such outsized bidding does not result in more cooling measures that affect genuine home buyers.


    Adam Reutens-Tan
    i m sure developer will know more in developing and selling property than Adam Tan ba...... If not Adam should be a developer and not a journist. As my friends always say, dont teach your dad how to ***k.

    furthermore, this is open market competition. If govt dont want pple to bid high, just put a price celling lor.....

    Cooling measures doesnt affect genuine home buyers as it doesnt cause price to go up nor does it restrict home ownership. Only things that results in more cooling measure is high high volume and high high prices.

    No Offences, Find Adam's sharing very low quality......

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    Quote Originally Posted by DaytonaSS
    i m sure developer will know more in developing and selling property than Adam Tan ba...... If not Adam should be a developer and not a journist. As my friends always say, dont teach your dad how to ***k.

    furthermore, this is open market competition. If govt dont want pple to bid high, just put a price celling lor.....

    Cooling measures doesnt affect genuine home buyers as it doesnt cause price to go up nor does it restrict home ownership. Only things that results in more cooling measure is high high volume and high high prices.

    No Offences, Find Adam's sharing very low quality......

    Don't think Adam is a journalist, he seems more like another Singaporean who usually writes to ST Forum.

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    Quote Originally Posted by wenqing
    Don't think Adam is a journalist, he seems more like another Singaporean who usually writes to ST Forum.
    just feels like he may be a vested speculator scare of more measures to come. Real Owner home buyers welcome cooling measures, not fear them.

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    Quote Originally Posted by DaytonaSS
    just feels like he may be a vested speculator scare of more measures to come. Real Owner home buyers welcome cooling measures, not fear them.

    Maybe he wanted to buy more properties but got affected by 4th cooling measure as he has to fork out more cash and loan less to buy 2nd and 3rd properties.

    ST Forum got plenty of letters about property lately.


    Maybe both the spike and cooling measures was really sharp and unprecedented.



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    Quote Originally Posted by DaytonaSS
    just feels like he may be a vested speculator scare of more measures to come. Real Owner home buyers welcome cooling measures, not fear them.
    not all real buyer welcome measure. some buyer just save enough for the 20%......LTV measure kicks in. this measure really push this group of people far far far from getting their dream home. furthermore, the measure did not bring down price. so those who just about to get their dream home see their dream burst by the measure....

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    Quote Originally Posted by wenqing
    Maybe he wanted to buy more properties but got affected by 4th cooling measure as he has to fork out more cash and loan less to buy 2nd and 3rd properties.

    ST Forum got plenty of letters about property lately.


    Maybe both the spike and cooling measures was really sharp and unprecedented.


    he should celebrate then, cos it shows developers confidence that market will chong!!!

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    Quote Originally Posted by ay123
    not all real buyer welcome measure. some buyer just save enough for the 20%......LTV measure kicks in. this measure really push this group of people far far far from getting their dream home. furthermore, the measure did not bring down price. so those who just about to get their dream home see their dream burst by the measure....
    for pple whom own 1 property loan is still 20% LTV ma..... 2nd property owner cannot call OWNER HOME i guess, cos there is element of investment le.

    My views are that the measure bought time for those group of pple to decided b4 the price gain momentum and keep on running away.

    I got absolute no doubt that if the measure didnt come fast n swift, we will see more sharp ran up in prices.

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    Quote Originally Posted by ay123
    not all real buyer welcome measure. some buyer just save enough for the 20%......LTV measure kicks in. this measure really push this group of people far far far from getting their dream home. furthermore, the measure did not bring down price. so those who just about to get their dream home see their dream burst by the measure....
    This is quite true. Effectively MBT push this group to save some more, and upgrade later. And he hopes price can stay still because of the harsh SSD penalty. With such huge SSD, any speculative, or mildly short term investment elements are wiped out. Without speculative element, he hopes price will stop rising.
    ... Well that's the plan too bad the Fed doesn't care abt anyone else's asset inflation problem. And MAS is too scared to change the SGD policy. The massive liquidity at 0% rate is making this problem very hard for everyone.

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    Quote Originally Posted by amk
    This is quite true. Effectively MBT push this group to save some more, and upgrade later. And he hopes price can stay still because of the harsh SSD penalty. With such huge SSD, any speculative, or mildly short term investment elements are wiped out. Without speculative element, he hopes price will stop rising.
    ... Well that's the plan too bad the Fed doesn't care abt anyone else's asset inflation problem. And MAS is too scared to change the SGD policy. The massive liquidity at 0% rate is making this problem very hard for everyone.
    agree MAS is a problem too. when inflation is at the 5 to 6% level, keeping interest rates at less than 1% for housing loans is just crazy. it is courting troubles, if not playing with fire.

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    MAS does not have control over bank interest lah ...

    M3 up 20% since 2009:

    2009 (million)
    Jan 346,731.0

    2011 (million)
    Jan P 413,235.9


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    People who said such things & blaming MAS are suffering from puting cash in banks at low interest & seeing their vaues evaporate & seeing others making money, eye red red?

    MAS is not god, can't solve all problems simultaneous.

    Quote Originally Posted by stalingrad
    agree MAS is a problem too. when inflation is at the 5 to 6% level, keeping interest rates at less than 1% for housing loans is just crazy. it is courting troubles, if not playing with fire.

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    I will tell you the real reason why people are buying. Inflation, new IRs , immigration,population growth, low interest rates, and enbloc millionaires are only a small composite part of it. There is another more pertinent REAL mother of all reasons that I shall only reveal after the election.......you will be lost for words, I assure you....

    your little humble brother,

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    Property huat ahhhhh

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    That is really sensational! I can see those reasons you cited but another pertinent REAL mother of all reasons? Looking forward to your revelation!

    Quote Originally Posted by blackjack21trader
    I will tell you the real reason why people are buying. Inflation, new IRs , immigration,population growth, low interest rates, and enbloc millionaires are only a small composite part of it. There is another more pertinent REAL mother of all reasons that I shall only reveal after the election.......you will be lost for words, I assure you....

    your little humble brother,

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    Quote Originally Posted by teddybear
    That is really sensational! I can see those reasons you cited but another pertinent REAL mother of all reasons? Looking forward to your revelation!
    Greed and fear lor .

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    Quote Originally Posted by stalingrad
    agree MAS is a problem too. when inflation is at the 5 to 6% level, keeping interest rates at less than 1% for housing loans is just crazy. it is courting troubles, if not playing with fire.
    MAS has a bigger picture to look at. Property market is just part of it. Is it better to have a competitive export economy and live with asset inflation ? Or is better to have a cool pty market along with a negative growth / uncompetitive economy ? I guess the decision had already been made. For property, just use administrative measures to cool it as much as it can. 60% or 50% LTV ensures banks won't fail in the event of major crash/recession (Irish style). So SG as a whole is safe. Never mind a little inflation here and there.
    We as small investors should then judge the situation and make the best out of it.

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    Good observation. So now that he has become bullish, maybe we should all become bearish?

    Quote Originally Posted by amk
    actually, if u had *really*followed all these market talks, you will realize Colin Tan is one of the very few "analysts" that are bearish. He had been talking down all this while.

    now even he is changing his tone

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    Quote Originally Posted by Wild Falcon
    Good observation. So now that he has become bullish, maybe we should all become bearish?
    i oredi become neutral....

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    Quote Originally Posted by blackjack21trader
    I will tell you the real reason why people are buying. Inflation, new IRs , immigration,population growth, low interest rates, and enbloc millionaires are only a small composite part of it. There is another more pertinent REAL mother of all reasons that I shall only reveal after the election.......you will be lost for words, I assure you....

    your little humble brother,

    u r making me very 'gian'....

    wah liu.....make sure u dun disappear after erection!!!

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