D for dilapidation. E for trust erosion. L for loss of market share.
The number of properties for rent is on a growth trajectory.
Those developers who think they can rent and wait for better times face the risk of a bloated rental market and dilapidated properties both at the level of individual units and the communal areas.
There is a range of outcomes for the sell side, given the monetary policies are returning to normal, and any value in that range for their properties is significantly less than they wish for. They can wait and hope for not as big a discount as they have to provide now, but an actual spend on dilapidations and financial expenses against debt will be high.
Or they can sell now at a reasonable price, clear off their debt and continue building not to lose market share. The slower the turnover of properties at the developers, the higher the likelihood of losing market share to the competitors and problems in retaining direct employees and contractors.
The sellers and their agents need to wake up to the reality and recognize that greed and random price generation no longer sell. Failure to revise the appetites and approaches will only deepen the raft between the buyers and sellers and result in a complete collapse in trust in the industry.
