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PRC DEVELOPERS JACK UP S'PORE PROPERTY PRICES, GOVT'S OPEN POLICIES PARTLY TO BLAME

PRC Chinese firms are squeezing out local developers by infusing huge amounts of funds into an already overheated market, which in turn eats into the pockets of everyday Singaporeans who are now barely able to afford a home.

One example is the plot of land located in Queenstown estate, which is located just beside Stirling Road. That plot of land, long untouched due to its exorbitant price, has been snapped up by an unnamed property developer who was willing to pay S$685.25 million (HK$4 billion) for the plot on 10 April this year.

After a tender was launched, 13 bids were received for the 99 year lease on the plot. The highest winning bids were a record $1.002 billion, lodged by 2 Chinese developers in a consortium, Logan Property and Nanshan Group. Unsurprisingly, Logan, which is listed in Hong Kong, won he bid.

That is not the only example. Since the start of this year, 8 land sites released by the Singapore government so far have been won by PRC developers whose bids have far outstripped what local firms were willing to pay. Many of the winning bids were twice that of local firms.

This spells trouble, as Chinese investors flush with cash are now making their presence felt in global property markets, including Singapore and the Asia region. Experts are warning that high bids for land in Singapore, and the lack of government curbs on these bids, could lead to property prices becoming even more unhealthy than they already are.

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According to a South China Morning Post report, in 2017, foreigners who won their land parcels bid, on average, 4.8 per cent higher than the second-highest bidders. For local players who won their land bids, the average winning bid was just 2.5 per cent above the second-highest bid.”

The percentage of foreign bidders for land sites has also jumped from 25 per cent in 2015 to 34 per cent so far this year.

Chinese construction companies are also squeezing out local companies, snapping up local projects and using their vast resources and full value chains to their advantage. Chinese firms are not known to give out jobs to local subcontractors, preferring to give their businesses to foreign or China-based companies.

Even public sector projects are not spared, with many Chinese firms outbidding local firms because of economies of scale.

“It’s like having a heavyweight beat up a welterweight boxer. When they come here, they have no restrictions. But when we go to China, we have to cross several hurdles to bid for projects. How is this fair?” asked the firm’s senior manager.

“It’s a strategic imperative. They have spare capacity and can get steel, sand and other materials cheaply, compared to a local firm,” said the CEO of International Property Adviser, Mr Ku. “So after accounting for cheaper materials, they can still price their units competitively.”

He also warned that the Chinese firms’ preference to rely on their own managers could spell trouble for local white-collar professionals in the real estate industry.

“If the bids are being won by Chinese firms, and the Singapore big firms like CapitaLand and CDL are not developing parcels of land, then the mid-level manager jobs could be at risk,” said Ku.

Sourced from : All Singapore stuff

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NETIZEN ASKS COLUMBARIUMS TO ALLOW BURNING OF OFFERINGS OR RISK LOSING CULTURE

PRC DEVELOPERS JACK UP S'PORE PROPERTY PRICES, GOVT'S OPEN POLICIES PARTLY TO BLAME