I was at the Queen Victoria Market in Melbourne recently with a friend, browsing, when I came across a stall selling boots.
It's summer in Australia, but my Singaporean habit of thinking ahead got me thinking of stocking up on winter boots ahead of time. The prices for the iconic Australian wool-lined boots looked reasonable.
"Will these prices go up in winter?" I asked the stallholder, expecting him to say Yes in hopes of making a quick sale today.
"Not this time," he said. "Maybe a little bit other time, but not now. Business is no good, I have lots more stock in the warehouse, I won't be raising my price next year." (Winter is June next year.)
My friend joined in the conversation and soon the stallholder was explaining the situation. "You see this stall, that stall?" he said, pointing to neighbouring stalls selling apparel or household goods. "From China. They come, they pay the rent, they set up shop, all our business affected."
"Oh, because they can get goods from their China contacts cheaply?" I asked.
"No, no," he shook his head. "They set up shop here, make money, not make money, they don't care, they bring their family, their relatives over."
My friend added: "They set up a business to get an investor visa, then they use it to bring their families into the country. The stall doesn't matter, they are not out to make money from the business."
The stallkeeper told us he was from Russia. The shoe business had been in the family for decades. While sales slowed in Melbourne, they had a thriving trade with Russian partners, he said, so his family was innoculated from the China factor.
A couple of days later, in another part of Melbourne, we had lunch at a sushi place. Well, the Google map and cafe name had the word "sushi" in it. There were some sushi and handrolls on the deli counter. But there was also fried noodle, fried rice, sweet and sour pork. The menu listed everything from tom yom soup to wanton noodles.
This was certainly no Japanese sushi joint. The food looked Chinese. True enough, the cafe-owner was an enterprising young man from Guangzhou, China, in his 30s. He had taken over the restaurant just two months ago. His wife and children were now in Australia.
Like the kaypoh, brash Singaporean Chinese we are, we asked how much he paid for the cafe assignment, and what the rental was.
I looked around the cafe while my friend chatted to the owner in Cantonese, a language I half-understand but am tongue-tied in. Many tradies (Aussie slang for tradesmen of all types, from car mechanics to plumbers to brick layers to builders), Asian and Caucasian, came in. Business was brisk but the cafe was open only from 7 am to about 3 pm.
My friend asked, business prospect to business prospect, if there was money to be made from the joint, which was on a busy minor road, with many car workshops around.
The answer was candid: "Just passable, but it's a way to get a business going."
A way to get a business going.
Sometimes, businesses are not quite what they seem. Foreign businesses may enter foreign shores - whether Down Under or Singapore's sheltered coves - not because of the intrinsic business fundamentals of the destination, but for extrinsic reasons that have little to do with the strengths of the destination market.
In other words, they might be driven by factors beyond the profit motive.
I started mulling over the two recent incidents in Australia when I read reports of the Monetary Authority of Singapore (MAS) issuing a warning about the property market in Singapore.
In its Financial Stability Review issued on Nov 30, the central bank warned about property risks, in remarks that have since been widely picked up by news and social media, with headlines on risks from "excessive exuberance" in the property market.
The report noted: "Recent developments in the property market pose potential risks to stability; market players should proceed cautiously."
It highlighted the coming stream of new homes to be built on the many land sites recently sold, and from the stream of condo projects sold en bloc for redevelopment.
They could add another 20,000 new units in the next one to two years, more than doubling the current supply of some 17,000 unsold units. Already, 30,000 homes are vacant. Add that to the new stock coming on stream and no wonder MAS warns that a supply imbalance could "weigh on rentals and property prices."
It urged buyers to be prudent: "Buyers should carefully assess their ability to service their mortgage debt in the long term, taking into account potential interest rate increases and uncertain rentals."
Or as a Facebook friend summed it up pithily when I shared that MAS report: "In other words, if you cannot afford to play the market, please don't."
What might be the source of that market exuberance?
One: Analysts. As I've written in a previous article, some analysts talk up the market with rosy projections, predicting things like 30 per cent price jumps in a year.
Two: Developers who place bullish bets on land also have a vested interest in exhibiting exuberance, so they can price their projects higher.
Three: Buyers. The property market, like the stock market, is sentiment-prone. When enough analysts and developers talk it up and buyers believe the hype, a market heats up.
One factor that underpins the growing heat in the private residential market here is the foreign factor - in particular, foreign developers, especially those from China.
There is growing interest from Chinese developers in our condo market. Some entered as construction firms partnering local developers, and went on to develop their own projects. From being developers, winning tenders for government land sales, a few are now venturing into the en bloc market, which is more complex as developers need to work with hundreds of existing home-owners.
How active are the Chinese players in the Singapore condo market?
A report in July cited Cushman & Wakefield data that found that foreign bids made up 34 per cent of all bids this year, up from 25 per cent in 2015.
It also found that when foreign developers win sites, their winning margin over the second-highest bid since 2015 is an average of 5.6 per cent - compared with local developers who win by 3.4 per cent.
Reports as of July indicate that China developers won four of eight government land sales sites. Some winning bids were record-breakers. For example, Hong Kong-listed Logan Property and Chinese developer Nanshan Group's bid for a residential land parcel in Stirling Road crossed the billion-dollar mark.
Chinese developers are also entering the en bloc fray.
A Business Times report in October said: "Chinese firm Kingsford Huray Development, owned by Chinese-citizen-turned-Singaporean Cui Zhengfeng, acquired Normanton Park, a former government housing project off Ayer Rajah Expressway, for S$830.1 million this month.
"This follows the purchase of freehold condominum project Sun Rosier for S$271 million by SingHaiyi Properties and Huajiang International Corporation, both controlled by Chinese tycoon Gordon Tang and wife Chen Huaidan.
"In May last year, Qingjian Realty bought former HUDC estate Shunfu Ville for S$638 million."
When Chinese developers start to make waves in Singapore's property market, isn't that a vote of confidence in Singapore and a sign that the market here is thriving?
Well, yes and no.
China developers are here because this is an open and well-ordered market. But, they may be driven by non-market considerations to bid high.
They may be prepared to bid high because they are fine with lower profit margins. Some want to diversify out of China or offshore their funds and are prepared to take on lower-margin projects.
For others, the private condo market here may just be a gateway - a way to get a foothold into the Singapore corporate sector so they can fish for bigger profits elsewhere - like the Chinese investors who start a business at a market stall in order to get a foothold in Australia and serve as a beach-head for family interests and future business opportunities.
A November report in Singapore Business Review, citing DBS Equity Research, noted: "Local players are also facing tough competition as foreign developers bid to snag a slice of Singapore's property pie.
"The increased presence of new foreign players in land tenders whose motivations go beyond profit margins - they seek to "plant their flag" in Singapore as well as deploy their internal excess capital and resources - has also resulted in land prices remaining elevated, the report said."
China developers have their own motives for getting into the local condo market. They play by Singapore rules, but they also march to the beat of their own internal motivations, some of which may not be market-driven.
So don't be fooled into thinking that the market must be heating up, because a handful of ambitious Chinese developers are bidding up land prices.
It's easy to get caught up in the signs of market exuberance and believe that when developers pay top dollar for condo sites, that condo prices must therefore rise. It's understandable to want to spring to catch a wave as it rises.
But buyers should be aware of the fundamentals: a possible supply overhang; and uncertain geopolitics. They should remain sober and analytical before jumping into the market.
China developers can come and go, but Singaporean home-owners are here to stay, and we should all aim for less exuberance and more stable, sustainable growth in the property market.