Singapore’s property market: blank cheques at ten paces

Would you pay half a million USD for a two-bedroom apartment out in the suburbs of your city?

In Singapore, you can do just that. Pravda has the story:

IN THE latest sign of the buoyant suburban property market, home hunters in Ang Mo Kio have been submitting cheques to buy homes at prices rarely seen outside Singapore’s prime central areas.

Buyers are said to be paying prices starting from $1,150 per sq ft (psf) for the upcoming 329-unit Centro Residences by Far East Organization.

This means two-bedroom units cost more than $800,000, while three-bedroom apartments will cost $1.1 million and above.

Ang Mo Kio station is about 20 minutes from downtown (Raffles Place station) on the train. Sydney readers, imagine an apartment somewhere around Lidcombe station; Melbourne readers, something out the back side of Essendon, closer to Pascoe Vale. You wouldn’t pay $700k AUD for that.

Okay, sure, part of that is supply and demand; Singapore is not massively endowed with land (although that sure doesn’t stop them growing upward instead of outward).

Then how about a blank cheque? Would you write a blank cheque for it?

At another suburban condo, Optima, located next to the Tanah Merah MRT station, more than 40 people lined up on Monday afternoon to stake claim on the 297 units for sale, even before the showflat opens on Friday.

[The developers] say buyers are so keen on the units that they have submitted blank cheques for them to fill in the amounts once the price list is available – a fairly common tactic in a boom market, and one that has resurfaced in recent weeks.

Am I wrong to think those buyers are absolutely nuts to hand over blank cheques with million-dollar-plus credit lines behind them? Imagine the scene in the sales office at 5pm on Friday, after the show flat closes…

“Rightyo boys, we’ve got two hundred blank cheques here. What’s the maximum amount we can fill them out for? Two million dollars each? Right, go on, get to it, and get ’em down to the bank quick-smart. You, order a crate of vintage Dom Perignon… and you, send a thankyou note to the Straits Times. I can’t believe they printed that crap about the blank cheques – and I can’t believe people fell for it! We’re rich, boys, RICH!”

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