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Luxury home market takes a tumble

Posted on 7 Jan 2014 | Comments Off

Some luxury home owners who bought during market highs are now experiencing losses of up to $1.2 million as prices of posh homes take a tumble.

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

Flash estimates released by the Urban Redevelopment Authority showed that luxury home prices fell by 2.1% last year – reversing the 0.8% rise recorded in 2012. This is likely attributed to the introduction of heavier stamp duties in 2013, which drove investors and foreigners away from the luxury home market. As a result, just 4,041 homes were sold in the prime districts which feature many upscale homes in 2013, down 20% from 5,094 luxury homes sold in 2012.

Case in point is a 1,679 sq ft unit at Paterson Suites that 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 2013. 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 in December 2013. It was bought in January 2011 for $6 million.

Overall, experts expect prime property prices to slide even 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 are left with no choice but to lower prices to move units.

By Getty Goh

Source : buybyeproperty – 7 Jan 2014

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Posted in Luxury Property, Property Market / Real Estate

Tagged Luxury home market, Luxury Homes, Stamp Duty, Urban Redevelopment Authority (URA)

Singapore among most expensive for foreign home buyers

Posted on 15 Jul 2013 | Comments Off

The purchase costs of new-build prime homes sold to foreign buyers in Singapore were ranked second-highest in the world, according to a Knight Frank study.

The Global Development Insights Q2 2013 report compares the fees and costs of buying new prime residential properties across global residential markets. The residential purchase costs include stamp duty, legal costs, as well as transfer and agency fees. The report also looks into annual costs of ownership for such homes, including wealth taxes, council or municipal taxes and property taxes.

In the global comparative ranking, Hong Kong and Singapore emerged as two markets with the highest purchase costs due to increased property taxes, after their respective governments introduced measures to cool the housing markets.

“Hong Kong is the most expensive location to buy a home, once all the associated costs have been factored in. Non-residents can expect to pay 25 percent on top of the purchase price when buying a US$3 million (S$3.78 million) home. The bulk of this consists of stamp duty costs and a property tax levied on foreign non-permanent residents,” the report said.

In Singapore, foreign buyers pay purchase costs of 19.3 percent. They are charged 18 percent in stamp duty which is the highest globally, following a hike in January to curb price growth – 15 percent additional buyer’s stamp duty plus the standard rate of around three percent.

Other markets with the top highest purchase costs are London (7.9 percent), Sydney (7.2 percent), and Bahamas (6.5 percent).

As for annual costs, Singapore landed in 10th spot while Hong Kong was number 14. New York, Bahamas, Miami, Barbados and Moscow were found to have the top five highest annual costs globally.

“Buyers need to be mindful of the taxes and charges they face when buying a property, especially given recent interventions by governments,” said Knight Frank.

Source – PropertyGuru – 15 Jul 2013