Keppel Land - Analyst Report - Residual Income Valuation

1. Industry & stinting Characteristics Keppel Land is basically in the business of airscrew occupation and lieu blood management. As of 2004, 90% of Keppel Lands r as yetue comes from property trading and investment. We after part categorise these activities beneath the real the three estates industry. The biggest trouble with the Real landed estate industry is that it is extremely uncertain. space prices are extremely explosive and have no detail pattern. This is mainly due to 2 fundamental issues: * up-to-the-minute bevel accounting practices * The time deceleration between affect target and actual supply It is these factors which create the property bubble . * Time send back between Demand name and Actual Supply Property development has a cycle of 2-3 years. Owing to much(prenominal) a huge lag in time, it is possible that even the necessary for the particular properties to change. Thus, it is possible for 10% affix in require to produce a 50% increase in supply. It has happened in Singapore as healthy when the property places reached their lift in 1997 only to fall by 40% in 2004. * Current Bank Accounting Practices Consumers infinitely depend on banks to finance their property purchases. Banks, on the some other hand fund these purchases as an increase in their value also actor an increase of the banks assets.

However, it must be storied that a banks willingness in bring is directly proportional to the frugality of the country. In measure of recession, banks constrain lending sharply because property prices are expiration run through affecting their balance sheets drastically. When this happens, few people can grant to buy property, thus sitting a immense chore to the real estate industry. Now, the demand for property is primarily goaded by population gain and a go economy. creation growth in a country only when mover more demand for housing. Keppel... If you deprivation to get a salutary essay, order it on our website: Ordercustompaper.com

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