12/16/2005

big cheers for orchard turn

the high bid for orchard turn has been greeted with big cheers by market players. it has brought a big smile to many happy faces. the property market is going to use it as a benchmark to guage property prices. it is a good sign that property prices are looking up. is it a good sign or a bad sign? singapore is losing its reputation as a shopper's paradise. the prices of things here are getting more expensive compare to our competitors. if malaysia can get its acts together, all the shoppers will be flocking up north. they have so many natural advantages. low wages, lower property prices, all means lower cost. why is it that we are cheaper than them? there is no reasons for malaysia or any other asean countries not to sell their products cheaper than us. all their costs are lower than us. and with our property prices being driven up again, it is a matter of time before we priced ourselves out of the market, just like our labour. once we are deemed as expensive, game over. we lose our competitive advantage. our retailers cannot make a living with such high cost of land and rental. they can only sell to a captive market up to a point. when people find it cheaper to buy from neighbouring countries, they will do so. when tourists find it cheaper to buy from somewhere, they will skip here. all the supporting industries will fall apart. three cheers to higher property prices. three cheers to welcome the death of retail businesses. and three cheers to the death of shopper's paradise.

2 comments:

redbean said...

i was reading this finding that singapore retail rental still got room to grow. it compares all the rentals of big european cities plus hongkong. so we are cheap.

did they take into consideration the income of those cities? did they take into consideration that singapore will be competing with kl, bangkok and jakarta? if these 3 cities are up and running, would we will be looking so expensive for nothing.

Matilah_Singapura said...

The market is always dynamic. Prices will fluctuate. depending on demand. God stopped making land a long long time ago :-)

S'pore's advantage is its tax and free labout market, plus it is a hub. However business folks evaluate the "big picturte". I know somew people who choose Thailand - although the tax is about twice that of S'pore, rents and workforce wages are less.

Entrepreneurs are speculatiors - risk takers. If they bid too high, they may not be able to get a sufficient yield. So there's a lot of "educated" guess work involved. I was suprised that Orchard Turn sold for such a premium. The next lower bid was only about 7-8% lower - not that great a margin.

We'll see how it turns out. If the speculators were wrong, goody goody for those "vulture" waiting in the wings.