Monday, 27 May 2013

The risks in property development

The risks in property development are:

1.  Insufficient own capital to fund the project.
2.  Over-leverage and excessive borrowings.
3.  Poor sales for various reasons - poor location, industry related reasons.
4.  Cyclical downturn.

Many property projects are launched in the cyclical upturn of the industry.  Soon many more jumped in the game.  When the cyclical downturn comes, the weaker developers suffer.

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