Why mainland developers appear to overpay...

[shri]

I have a question about land leases (will research this over the weekend).

Do these auctioned lots come with some sort of obligation by the developer to actually do something with the land - develop it in a certain time frame?

[Nep]

Yes Shri, it used to be different in the past and some of the "old" developers still have quite a lot of land reserves that they can hold.
Newer auctions come with obligations to the developers to build within a specified time.
As usual there are ways to stretch those.

[R.O.]

An interesting article which I think this layman can understand.

What they're doing is not a Ponzi scheme, but it's a family relation. It's a chain, a paper chain, of assets and loans and if one of the links breaks the whole chain may go to pieces. If one of the links breaks: for example if one of the banks whose lettter of credit they hold, or one of the companies whose bonds they hold, ceases to be creditworthy.

This is not an exact comparison, but it's rather like homeopathic medicine. You start with a mixture that contains a measurable amount of the medicinal herb, then dilute it again and again until there is no measurable amount of the herb left. The longer the chain gets, the less real strength it has.

[Char Siu King]

The whole shithouse will come crashing down one year.

[civil_servant]

Original Post Deleted

I don't believe that, so I'll keep renting instead. Tons of new flats coming up in our area. Should keep rental prices in check. I'm not too worried because if I rent and put my money in Champion REIT, I'm better off. Oh wait, I didn't just say that, did I?

[chuckster007]

Apartments at Kai Tak will need an average selling price of at least HK$25,000 per sq ft to ensure reasonable profit for the developer

FECK ME, a shitty 500 sqft apartment is going to cost like 12.5 Mil WTF