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The Strategy is well known that
More Land are only released
during tImes Of PEAK PROPERTY PRICES
Revamp land tender system
Letter from Ee Teck Siew
THE Government is currently ramping up its release of land to address escalating property prices.
It is estimated that approximately 53,000 units will be on the market, representing three times the current annual demand, and property analysts expect it to take years to clear this excess.
Perhaps the Ministry of National Development needs to review the current method of maximising land sale revenue. Land cost constitutes the highest component in the price of a property, as the Government sells land based on market value and market prices have been skyrocketing.
So, even if the Government releases a bumper crop of land now, these plots are expected to be sold at current market value which are pegged to prevailing market prices.
In other words, such land is to be sold in the high range, so it eventually ends up in the high price bracket when the property is sold.
It was reported that a plot of land at Alexandra Road is estimated to be sold at S$800 to S$850 per sq ft (psf) in a tender and the break-even price for the property developers could be around S$1,300 psf or higher.
This means the price of property built on land tendered today will continue to stay high a few years in the future.
If not, no developer will bid and the Government will have to stop the supply and the shortage problem will persist.
How can property prices fall or reach equilibrium if the property developer has no choice but to sell above the breakeven price?
The Government could consider awarding the land to the highest bidder, who would then pay based on the lowest bidder’s price or the comparable land cost which the Government awarded in the past — on condition that the selling price of the completed unit be adjusted downward for the land price difference between the highest and the lowest bid, when the completed units are sold to Singapore citizens.
This will not put developers at a disadvantage while ensuring sufficient supply of land to meet the demand.
There is no denying that in land scarce Singapore, property prices will have to go north but the Government has a duty to ensure that prices grow at a sustainable pace.
United States:
President Barak Obama: US$400,000, with US$50,000 expenses
Vice President Joe Biden: US$202,900
Cabinet Secretaries: US$157,000 - $186,600
Secretary of State (Hillary Clinton) - $186,600
United Kingdom: Prime Minister: $US279,000
Australia: Prime Minister: $US229,000
Hong Kong: Prime Minister: $US516,000
Japan: Prime Minister: $US243,000
Canada: Prime Minister: $US246,000
Germany: Prime Minister: $US303,000
France: Prime Minister: $US318,000
SINGAPORE
This was in line with economists’ average forecast and meant that the CPI for the first quarter rose 5.2 per cent from the corresponding period last year.
But there is likely to be good news ahead, according to economists, who say that prices may have seen their peak in the first quarter.
They say policy action by the Monetary Authority of Singapore to allow the local currency to strengthen against major currencies last year and again earlier this month will help curb inflationary pressures.
The Singapore dollar yesterday hit a record high of S$1.2317 against the US dollar, which will temper the rise in the price of imports.
Underlying the 5-per-cent CPI rise in March were higher transport costs owing to costlier Certificate of Entitlement premiums and fuel, higher housing costs due to rising accommodation and electricity rates, and dearer food, resulting from higher commodity prices globally.
Still, economists say the CPI will be more moderate for the full year, with headline inflation coming in at the upper end of the Government’s 3- to 4-per-cent forecast.
CIMB economist Song Seng Wun, who estimates 2011 inflation at 3.8 per cent, said:
“Utilities bills are likely to go up in the second quarter after they were brought down by Government rebates in the first.
“Transport costs remain high but inflation will ease because of a combination of tightening by the MAS and higher base of comparison.”
[#mIsleadIng cOmparIsOn ? ? ? ? The Only Based Year shOUld be Used #]
He added: “Although COE prices are higher than what they were a year ago, they are not increasing at the same rate as the previous year, so it looks like in terms of the year-on-year side, transport costs will continue to be the primary contributor to the headline CPI.
“But, going forward, its effect will become less pronounced, especially in the second half.”
Action Economics director David Cohen expects a higher rate of inflation.
“We’re looking for something around 4 to 4.5 per cent. That’s slightly above what the Government is saying but, like the Government, we expect that it would moderate a bit in the second half of the year. The base effect will be helpful.”
On a month-on-month basis, inflation ticked up a modest 0.1 per cent, led by the cost of housing, clothing and footwear and recreation.
The number, though, was capped by transport prices, which fell 0.6 per cent.
There is a dark cloud, though.
Economists warn that oil prices — which have advanced 23 per cent this year amid tensions in the Middle East and North Africa — could continue to rise and add more pressure.
CIMB estimates that for every US$10 increase in the price of a barrel of oil, headline inflation in Singapore will rise 0.2 to 0.3 per cent.
[#NOTE: OIL PRICE IS HEDGED ? ? ? ?#]
With agency reports
After 5% rise, consumer prices may have peaked
Chris Howells
christopherh@mediacorp.com.sg
Underlying the 5-percent CPI rise in March were higher transport costs owing to costlier Certificate of Entitlement premiums and fuel, higher housing costs due to rising accommodation and electricity rates, and dearer food, resulting from higher commodity prices globally.
During 2010, OIL prices ranged bounded between USD60 and USD80 ? ? ? ?
but END CONSUMER PRICES [raised at USD150 level] remained HIGH and were ? ? ? ?
NEVER adjusted dOwnward to ACTUAL COST [about 50% lower] ? ? ? ?
cOUld thIs be the PEAK ? ? ? ?
tIme tO SELL ALL ? ? ? ?
and SHORT ? ? ? ?
rIdIng the dOwn TREND ? ? ? ?
ruanlai ( Date: 26-Apr-2011 09:46) Posted:
|
1st CASE
Management DID NOT HEDGE so that they could GAIN EXTRA PROFIT for NOT HEDGING but in fact ENDED up with HUGH DOWNSIDE.
YET ENTREPRENEUR PASSED the LOSSES to END CONSUMERS ? ? ? ?
2nd CASE
Management HEDGE WRONG AT PEAK PRICES and ENDED UP with HUGH DOWNSIDE AGAIN.
YET AGAIN ENTREPRENEUR PASSED the HIGHER COSTS to END CONSUMERS ? ? ? ?
DO END CONSUMERS NEED this type of " A" TEAM ? ? ? ? Or " E" TEAM ? ? ? ?
AND EVENTUALLY EACH TIME END CONSUMERS STILL BEAR ALL THE LOSSES AND THE HIGH COSTS OF LIVING ? ? ? ?
END CONSUMERS Might as well form a CO-OPERATIVE and run the SHOW by themselves ? ? ? ?
Captialand - Dirty Cheap
1Q 2011 Net Profit up 241%
# OIL PRICE PARADIGMA 002#
AUGUST 2008 OIL PRICE FIRST PEAKED
When OIL PRICE CRASHED tO belOw USD40, every gOOd and service sUpplIer was stIll sO HAPPY maintaining theIr
E X P L O D E D
PRICES #
THE REASON GIVEN was
THEY HEDGED OIL PRICE AT USD150 and is still paying USD150 though
actual price had fEll to below USD40.
THUS, RETAIL PRICES were NEVER adjusted downward based on ACTUAL PRICES.
# OIL PRICE PARADIGMA 001#
When OIL PRICE hIt USD150, every gOOd and service sUpplIer was sO HAPPY and EXCITED to find an EXCUSE tO
E X P L O D E
theIr PRICES #
In Order tO knOw the
REAL EFFECTS Of S$ Exchange Rate
CHECK CHART of each S$ cUrrency paIr.
S$ vs USD
[As USD is a weakenIng cUrrency, any rIse of S$ agaInst USD may nOt be dUe tO Its STRENGTH bUt it is due to USD's relative WEAKNESS against S$]
[It is necessary to CHECK several USD paIrs for CONFIRMATION. AUD/USD S$/USD MYR/USD RMB/USD]
S$ vs AUD
S$ vs RMB
APPARENTLY ? ? ? ?
S$ exchange rate adjUstment ? ? ? ?
has always been and still is ? ? ? ?
a REACTIVE LAGGING AFTER THE FACT HINDSIGHT MEASURE ? ? ? ?
RETAIL PRICES had nOt been cOntrOlled and HELD BACK at ALL ? ? ? ?
rIsIng INFLATION cOntInUes tO hIt the IncreasIng hIgh cOst Of lIvIng ? ? ? ?
mOst peOple bUy ? ? ? ?
MYR fOr dEcEnt Interest rates and use the interest income as a shopping TREAT ? ? ? ?
USD fOr US stOcks' trading pOtentIal ? ? ? ?
AUD fOr gOOd Interest rates plus InflatIOn hEdgE ? ? ? ?
YUAN Only If it is depOsIted In CHINA ? ? ? ?
[OFF-SHORE YUAN is a STRUCTURED TRAP DUE HIGH MIDDLEMAN COSTS ? ? ? ?]
[sOmeOne In thIs fOrUm pOsted last year that he was TRAPPED by YUAN DEPOSIT in SINGAPORE and lOst hIs pants ? ? ? ?]
Each tIme
1) S$ raIses agaInst US$ ? ? ? ?
2)) CNA News repOrtes HIgher C P I ? ? ? ?
3))) Check RetaIl PrIces in the shOps
PrIces Of gOOd had already gOne Up ? ? ? ?
CPI
INFLATION
EXHANGE RATE