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07-01-2018, 09:08 PM
Let me add some pointers that I am aware of, to this current discussion:
1) A couple can buy 2 properties without being affected by the ABSD, by putting each property under a single owner.
2) I personally know a few family owned, private developers. These guys are large enough to list easily, but do not do so as they are mostly family and privately owned, and prefer to maintain control.
Their comments (on separate occasions) regarding the current situation, are strikingly similar.
The current uptick in the property sector is driven largely by positive sentiment, particularly so with the recent all time high en bloc fever in recent years.
Yet all those doing en blocs are all public listed companies. Their landbanks have been decimated in recent years, and they have to look in the secondary market to find en bloc deals to show activities to their shareholders.
The 2 privately owned developers that I know are not holding on to any more private residential projects.
They still dabble in related projects such as dormitories, HDB projects etc, but most of their activities revolve around Australian projects currently.
3) Add approximately $300 psf or so to the en bloc prices, and a redevelopment charge to be paid to the gov, and you have an estimated approximate $1,600psf in breakeven costs for non-core projects. This means that in the next 5 years, many developers expect to be able to move units at $1,700-$1,800 psf type of pricing for non-core, suburban projects! This is not my own estimation, again, this is derived from my discussions with people in the industry. Privately owned developers are staying out of this game, as they are not confident of achieving this price level. Yet, they don't seem to know for sure that this level can't be reached either.
In short, even being in the industry, they can't predict the craziness of the demand, but think that working at such price levels is too optimistic, and would prefer to stay out first.
4) The failure to garner adequate land to replenish their land bank is the result of aggressive bidding by foreign competitors, some of which are willing to bid at such razor thin margins, that even if everything goes smoothly, it'd hardly add to earnings. The project is done just to sustain their current operations.
5) The gov has started to place more emphasis on other factors in the tender process, other than just pricing.
In recent tenders, the cheapest bid did not win.
6) Certain foreign developers (particularly the chinese), have a really terrible reputation within the industry.
Personally, what I heard makes me really hesitate if the project is done by a chinese developer.
7) Wont elaborate too much on this point right now as yet, but within the industry, every player knows that the gov's recent push in the industry for productivity gains etc, has been an abject failure.
Nobody likes it, and basically, those who talk about it in the media positively.... are just bullshitting.
1) A couple can buy 2 properties without being affected by the ABSD, by putting each property under a single owner.
2) I personally know a few family owned, private developers. These guys are large enough to list easily, but do not do so as they are mostly family and privately owned, and prefer to maintain control.
Their comments (on separate occasions) regarding the current situation, are strikingly similar.
The current uptick in the property sector is driven largely by positive sentiment, particularly so with the recent all time high en bloc fever in recent years.
Yet all those doing en blocs are all public listed companies. Their landbanks have been decimated in recent years, and they have to look in the secondary market to find en bloc deals to show activities to their shareholders.
The 2 privately owned developers that I know are not holding on to any more private residential projects.
They still dabble in related projects such as dormitories, HDB projects etc, but most of their activities revolve around Australian projects currently.
3) Add approximately $300 psf or so to the en bloc prices, and a redevelopment charge to be paid to the gov, and you have an estimated approximate $1,600psf in breakeven costs for non-core projects. This means that in the next 5 years, many developers expect to be able to move units at $1,700-$1,800 psf type of pricing for non-core, suburban projects! This is not my own estimation, again, this is derived from my discussions with people in the industry. Privately owned developers are staying out of this game, as they are not confident of achieving this price level. Yet, they don't seem to know for sure that this level can't be reached either.
In short, even being in the industry, they can't predict the craziness of the demand, but think that working at such price levels is too optimistic, and would prefer to stay out first.
4) The failure to garner adequate land to replenish their land bank is the result of aggressive bidding by foreign competitors, some of which are willing to bid at such razor thin margins, that even if everything goes smoothly, it'd hardly add to earnings. The project is done just to sustain their current operations.
5) The gov has started to place more emphasis on other factors in the tender process, other than just pricing.
In recent tenders, the cheapest bid did not win.
6) Certain foreign developers (particularly the chinese), have a really terrible reputation within the industry.
Personally, what I heard makes me really hesitate if the project is done by a chinese developer.
7) Wont elaborate too much on this point right now as yet, but within the industry, every player knows that the gov's recent push in the industry for productivity gains etc, has been an abject failure.
Nobody likes it, and basically, those who talk about it in the media positively.... are just bullshitting.
