Daily Lessons from Life 22 December 2010 - S$36m House Called Off?

Safely and smoothly returned to Singapore from Amsterdam, Holland, this evening without any delay at the Schiphol Airport! Glad that we were NOT in Heathrow or Gatwick Airport in UK!!

"Wed, Dec 22, 2010 AsiaOne - $36 million Sentosa Cove deal called off

The deal to sell the S$36 million Sentosa Cove home located on Paradise Island has been called off.

According to a report in Lianhe Zaobao, the deal fell through after the buyer realised he paid over the market rate after reading media reports surrounding the sale in May this year.

The house has a land area of 14,983 sq ft and a built-up area of about 17,000 sq ft.


The buyer, who is believed to be a 31-year-old Chinese permanent resident Shen Bin, is the son of Shen Wen Rong, the president of Chinese firm Sha Steel."

Definitely a big headline story! Imagined the sensation the story created when it first broke news in Singapore! Value is what the buyer is willing to pay, damned the cost!!

Lessons for me are:

1. the mindset about real estate must be: residential market is for one to have a roof over one's head and heads if one has a big or bigger family. It is the basic need of ordinary people and the government's key task is to help them get one. It is NOT for profit or the illusion of 'appreciation in capital value'!;

2. the investment segment of the real estate business can be: commercial property and residential rental market. It is up to the market players to play or pay as long as there are wiling buyers and willing sellers. They CANNOT be profiting from the pure residential market. Period. If they are allowed to participate, they will skew the market and create false market prices! Like in this situation! S$36m for a 99-year leasehold bungalow in an island that may be submerged in water given the global warming and rising sea level!;

3. this story also provide a caution to the government that if you are NOT careful, it is easy to create a feedback frenzy founded on very unrealistic and unstable ground. A bubble can be formed quicker than you can monitor and manage it. A burst in any property bubble will always bring down 90% of the buyers with 10% of the 'smart' sellers selling out before the prices crashed!

Rich PRC Chinese PR may not be the best thing to happen in Singapore if we want Singaporeans to own homes and not just houses! A house if NOT a home. Think about it!!