Results 1 to 2 of 2

Thread: Various factors behind high land costs

  1. #1
    Join Date
    Oct 2011
    Posts
    10,829

    Default Various factors behind high land costs

    Various factors behind high land costs

    Jun 18, 2017


    It is a common misconception that high land cost will lead to high property prices (Keep foreign bidders out of housing; June 11).

    The reality is that land cost is a result derived from the prevailing property prices and other influencing factors such as interest rates.

    To give an analogy, the prices of flour would fluctuate according to the demand for bread.

    In the same way, the demand for residential units, and their prices, would affect land costs.

    Hence, developers intending to make a profit from any development would do their sums, based largely on the prevailing property prices.

    Foreign developers expose themselves to higher risks if they bid high for land, as this will squeeze the other components of the development, including project profitability.

    We should not restrict them from bidding, if theirs is an investment decision.

    Perhaps they have a more optimistic outlook on our longer-term economic conditions.

    Singapore is in an enviable position compared with many countries because we have many affordable housing options, particularly a range of choices of public housing unparalleled anywhere else.

    Some of the cooling measures here, such as the total debt servicing ratio and loan-to-value limits, also help minimise any social repercussion from exuberant purchases.

    Stephen Chia Keow Chin

  2. #2
    Join Date
    Jun 2009
    Location
    Southbank
    Posts
    9,531

    Default

    To give an analogy, the prices of flour would fluctuate according to the demand for bread.

    Not a good analogy to use if you don't eat bread every day.

    It was not true when I was eating bread for 8 years and 8 months.

Similar Threads

  1. High maintenance costs likely behind bids to sell en bloc
    By reporter2 in forum En Bloc Discussion and News
    Replies: 0
    -: 26-12-17, 19:30
  2. Land costs hurting developers' profits
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 14-10-15, 10:04
  3. Time to address land costs and supply?
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 5
    -: 21-11-13, 14:36
  4. High building costs of underground space a big challenge
    By mr funny in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 04-02-10, 02:24
  5. Condo land falling below building costs
    By mr funny in forum Singapore Private Condominium Property Discussion and News
    Replies: 1
    -: 24-07-08, 17:47

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •