SINGAPORE - 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."