Originally Posted by
seletar
Developers are victims ? Is this a joke ? As I've said before, no one is forcing the developers to make bids. If the reserve price is too high, then don't bid, the choice is theirs. How is this unfair ?
The Govt is not forcing developers to make bids and the reserve price is what the Govt value the land, if the developers think the valuation is too high then don't bid, simple as that. Just like if people think private property price is too high, then don't buy. Buy HDB instead.
Developers are not stupid and reckless, they do their due diligence before deciding to bid for the plot as it involves a large amount of money. Developers are educated and informed, they know the market, they know the reserve price, they know purchase terms of the Govt, they know that the Govt reserves the right to change rules, they are aware of the threat of CM and the various risks invloved, yet they still went ahead to bid for the land. The sale of land is a business transaction, willing buyer, willing seller. The developers buy at their own risk. It is not the business of the Govt to guarantee developers profit or protect developers from losses if they cannot sell their units from the plot. And it is not right for developers to complain to the Govt, or even more ridiculously, blame the Govt for their plot bidding decisions or their inability to sell their inventory at the high prices they want. Property buyers are also not stupid, if price and product is not attractive, why would they want to buy from the developer.
No one forced Capital Land to make that ridiculously high bid for the Sky Habitat plot, in fact CAPL's bid was much higher than the second highest bidder. If CAPL is unable to sell units of Sky Habitat and gets burnt, it is the mistake of their management on the bid price, it is not the Govt's fault. If their shareholders want accountability, they should look for the management that made the bid.
Banks are also victims ? is this another joke ? If you haven't notice, local banks have been aggressive in pushing home loans the past few years by enticing consumers with low mortgage rates. Now these banks have hooked record number of mortgages borrowers and record amounts of housing loans , it's only a matter of time before these banks increase mortgage rates on consumers to boost net interest income and bottomline. The ones that will truly suffer in the end are the mortgage borrowers.
And yes, that was a cheap shot you did to me.