Sale of properties in the Sentosa Cove district may have risen, but is it at the expense of losses to the property owners?
Sellers asking for lower prices as property slump in Sentosa Cove continues
Home prices in Sentosa Cove have dipped again this year.
Analysts are fearing that the slump may continue as more sellers are willing to ask for lower prices. Could this trend last longer than expected or could it simply be a matter of sellers following suit?
Sentosa Cove is one of the only places in Singapore where foreigners are allowed to purchase landed properties, subject to approval. A decade ago, it was promoted as a haven for the super-rich.
In 2012, Australian mining magnate Gina Rinehart bought 2 units at the Seven Palms condominium for $57 million.
But half of Sentosa Cove properties sold in from January to July this year were done so at a loss. More than half of the 29 units sold within this 7-month period sold at a loss. The losses range from 20% to 43%.
Last year, only 18 out of 62 sold at a profit, despite hopes for a recovery after a 5-year slump.
Investors attracted by lowered prices may bite
July’s hike in Additional Buyer’s Stamp Duty (ABSD) may also have dampened the outlook slightly.
Foreigners buying properties in Singapore now have to pay 20% stamp duty, up from the previous 15%. Some industry experts say part of the reason for the trend could be the increasing mortgage rates which some owners are finding difficult to manage.
However, when there are those who are selling, there will be those who are buying. And perhaps the lowered prices have managed to entice investors who have been waiting by the sidelines for the right opportunities to present themselves. Sellers are aware that it is very much a buyers’ market right now and only properties priced reasonably will be sold. There will also be fierce competition from units on the mainland and other freehold properties.