Developers with quasi monopolistic powers dominate

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developers with quasi-monopolistic powers dominate the full spectrum of the market through trans-regional operating networks. This is a common situation in the mature property markets of developed countries such as the UK, New Zealand and Australia. A brief description of the features of these countries‘ property markets is provided here based on a review of current literature. Haley identified that real est ate is a ‗highly oligopolistic‘ industry in UK. Haley observed that the property industry in the UK has combined land development with construction to form a complex, competitive, powerful industry. As depicted by Ballina Byron through case studies, there are a great many developers (about 800 firms) in rural regions but with very low mean outputs (an average of eleven lots per year). These smaller developers have a high deconcentration rate. A totally different story applies to the larger firms covered by the same study; the top four leading developers had a combined 64% market share (Ballina Byron,). This illustrates the highly oligopolistic nature of the UK‘s property market. Similar to the UK, the model of land developers combined with contractors is becoming a trend in the real estate industry in Australia. The alliance between contractors and land developers aims to improve their market competitiveness enabling them to chase higher monopoly profits as well as maintain a dominant position in the market.
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45 Mergers and acquisition amongst the relevant enterprises along vertical and horizontal value chains in the industry is another way to leverage up the competitiveness of real estate developers. Through an expansion in business scale and movement up the value chain, developers can grow in both market share and sales volume. The real estate industry‘s pattern of development in developed countries is a useful reference for developing countries like China. China‘s real estate market has evolved from almost nothing in a relatively few years. Now there are many enterprises operating in the market, and the number is increasing every year keeping pace with the economy‘s rapid rate of growth. However, no developer in China has established an absolute advantage whether in business scale or market share. Compared with the leading developers in developed countries, Chinese developers are still in their infancy being relatively small in scale and with low competitive capabilities. Chinese developers have a long way to go to eliminate the gap between themselves and world-leading developers. Expressed another way, the real estate industry in China is in a fragmented, competitive phase. Facing future structural adjustments in their market and in their industry, real estate developers in China must take action to enhance their competitiveness so that they can survive and thrive in the future. Before taking any action, however, the priority must be to assess the current competiveness of real estate developers. In the remainder of this section, existing competitiveness measurement methods are summarised through an extensive literature review.
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