Daily Archives: 26 Aug 2009

Leng Beng lays down marker with Chestnut bid

Posted on 26 Aug 2009 | Comments Off on Leng Beng lays down marker with Chestnut bid

Toppish price may send inadvertent signal to restart confirmed list sales

EVEN as the dust settles on Hong Leong Group’s top bid at last week’s tender for a 99-year condo site at Chestnut Avenue, a discussion in some circles now centres on whether Hong Leong overpaid for the site.

As expected, Housing & Development Board said yesterday evening it has awarded the site to Sunny Vista Developments (a subsidiary of City Developments) and Hong Realty.

The two companies are part of the Hong Leong Group and teamed up to place the top bid of $143.68 million, which works out to a much-higher-than-expected land cost of $280 psf per plot ratio (psf ppr).

Some rival developers believe Hong Leong’s breakeven cost may be around the $600 psf mark and its projected average selling price near the $700 Continue reading →

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Posted in Developers

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Affordability of homes

Posted on 26 Aug 2009 | Comments Off on Affordability of homes

Let’s do the comparisons right

I REFER to last Saturday’s report, ‘Homes more affordable as incomes rise’.

It is meaningless to compare the current property boom with the peak of 1996 and then conclude that things are better now compared to then. This is akin to comparing the current sub-prime financial crisis with the Great Depression of the 1930s and concluding that things are not so bad.

Likewise, it is meaningless for Citigroup economist Kit Wei Zheng to conclude that things are better now than in 1996. The fact that the current property boom is not the worst does not imply that it isn’t bad.

For a better appreciation of our current situation, we should note that from 1990 to last year, condominium prices increased threefold, whereas during the same period, median household income grew by only 2.1 times. Continue reading →

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Posted in Property Market / Real Estate

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