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Thread: Some luxury home owners sell their places at a big loss

  1. #1
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    Default Some luxury home owners sell their places at a big loss

    http://www.straitstimes.com/archive/...-loss-20140104

    Some luxury home owners sell their places at a big loss

    Published on Jan 04, 2014

    By Cheryl Ong


    SOME luxury home owners who bought during market highs are selling their places at losses of up to $1.2 million as prices of posh homes take a tumble.

    Experts say losses on that scale are sporadic, but that the wider luxury market is clearly softening in the wake of various government curbs.

    Flash estimates released by the Urban Redevelopment Authority (URA) on Thursday showed that luxury home prices fell by 2.1 per cent last year - reversing the 0.8 per cent rise recorded in 2012.

    Investors and foreigners have been driven away from luxury homes after heavier stamp duties were introduced, experts said.

    As a result, just 4,041 homes were sold in the prime districts, which feature many upscale homes, last year, down 20 per cent from the 5,094 sold in 2012.

    URA data showed the harsh losses some sellers are suffering.

    A 1,679 sq ft unit at Paterson Suites for instance, suffered a loss of about $890,000. It was bought for about $4.5 million in June 2007, but sold at $3.61 million in November last year. This translates to a selling price of $2,150 per sq ft - a new low for the upscale project.

    At the coveted housing district of Sentosa Cove, a 2,820 sq ft unit at The Coast took an even bigger hit of at least $1.2 million, when it was sold for $4.8 million last month. It was bought in January 2011 for $6 million.

    Property agency DTZ's data also showed prices of non-landed homes in the prime districts of 9, 10 and 11 fell 0.5 per cent last year. "As we know, properties in prime districts see a large share of participation from foreigners," said Century21 chief executive Ku Swee Yong. "So the tougher additional buyer's stamp duty and the total debt servicing ratio basically ensured that foreign buyers were kept to less than 10 per cent islandwide."

    In January last year, the Government imposed a 15 per cent duty on foreigners buying properties, while a 7 per cent duty was slapped on Singaporeans buying a second property. Tougher loan rules were introduced in June.

    But while most of the losses suffered were on properties bought in 2007 and 2008 - when prices were buoyed to record levels by the burgeoning super-rich class - such examples are likely to be the minority, said Chesterton Singapore managing director Donald Han. Property prices in the city centre are, in general, still about 4.8 per cent higher than the peak in 2008, he noted.

    Still, experts expect prime property prices to slide further as developers move to slash prices.

    Foreign developers are given two years to sell all units, after their developments obtain a temporary occupation permit. To avoid penalty charges for missing the deadline, developers will lower prices to move units, said Ms Christine Li, research head of property agency OrangeTee.

    Homes owners selling their units will, as a result, have to adjust their expectations, she said.

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  2. #2
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    have i been doing the work for this reporter, Cheryl Ong?

  3. #3
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    Quote Originally Posted by bargain hunter View Post
    have i been doing the work for this reporter, Cheryl Ong?
    Sure seems like it, doesn't it?

  4. #4
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    For small people, its big loss, for the wealthy, its just a minor hiccup
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  5. #5
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    Quote Originally Posted by bargain hunter View Post
    have i been doing the work for this reporter, Cheryl Ong?
    Don't get made. Cheryl did not get a lot of benefit from copying your stories. Journalists get paid a pittance in Singapore, unlike American journalists.

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