New DBSS Singapore: Minister of National Development Corrects BT Article About DBSS Profits
This post was written by Minister Khaw Boon Wan in his MND Singapore wordpress Housing Matters site recently in July 2 in response to Business Times article "Profit margins for DBSS developers ‘look high’ ” (Jun 30).
Source:
http://mndsingapore.wordpress.com/2011/07/02/startling-but-false/
Startling But False
July 2, 2011
I was startled when I read the front page article in the Business Times “Profit margins for DBSS developers ‘look high’ ” (Jun 30). It alleged that the DBSS developer’s profit margin for Centrale 8 was 76%, even after it had reduced its highest selling price by over $100,000.
I thought it could not be right and had it checked. Sure enough, the article was fraught with serious errors.
For example, it quoted a land price of $82,222,000 and a maximum GFA of 721,188 square feet for the project. Both figures were wrong. The correct figures were respectively $178,128,000 and 682,385 square feet. This was a huge difference of almost $100 million. The errors led to a gross over-estimation by BT of the developer’s profit and gross profit margin.
Based on these figures alone, the profit margin would have been 26%, not 76%.
But even the reduced figure was wrong, as the article had excluded key cost items such as financing, marketing and administrative costs. These are significant costs and when included, would have further lowered the profit margin for all the DBSS projects listed in the article.
I have been in MND for 5 weeks, and not sleeping well. I am working my guts out to try to calm the market, for the good of all Singaporeans.
But I can’t do it alone. I need all to help.
HDB architects are working round the clock to ramp up BTO supply. Contractors are building up capacity to deliver the flats on time. HDB is setting BTO prices carefully to help guide the market.
I hope our media can do their part too. There is some panic buying out there, by people worried that prices will continue to rise. Sensationalised articles will merely feed the frenzy.
If only BT had verified the facts, the misleading article could have been avoided. Please help to circulate this blog to your friends.
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