Nine units purchased in 2009 were sold this year at a loss in the sub-sale market, according to an analysis by Savills of caveats captured by the URA Realis as of October 19.
According to the analysis, 78 out of 87 homes purchased between 2006 and 2009 were sold for a profit.
The sellers who lost money sold one unit each in Leonie Parc View, Grange Infinite, Paterson Linc and Orion, two in Parkview Eclat and three in Scotts Square at sizes ranging from 818 sq ft to 3,250 sq ft. Eight of the nine units were acquired from developers.
The two biggest losses were seen at Parkview Eclat, where two sellers lost $1.75 million and $1.72 million each. Both owners acquired the units from property developer Chyau Fwu Group in 2007.
According to Steven Ming, executive director for prestige homes at Savills Singapore, the high-end market has yet to recover to the peak levels in 2007 and 2008, and homes generally continue to trade at 10 percent to 15 percent discounts.
The fact that all nine losses were seen on units acquired in 2007 “may be due to the high prices the owners paid when the residential market reached its peak in 2007”, said Mr. Ming.
On the contrary, units acquired in 2006, 2008 and 2009 were resold at a profit this year. Mr. Ming also said more owners incurred losses in the second and third quarters of 2010 than in the first quarter.
Ku Swee Yong, chief executive of International Property Advisor, said that some owners could just be “weary” of holding onto their properties, particularly as tenants have become more difficult to find following an outflow of expatriates last year.
“If you were a tenant with a monthly budget of $9,000-12,000, there will be many vacant brand new properties to choose from – Ardmore II, CityVista, BelleVue, St Thomas Suites and Latitude, just to name a few – and these new projects will be competing with older, more established and larger-sized units such as those in Ardmore Park and Grange Residences,” said Mr Ku.
Currently, the number of loss-making transactions is still very low, said Mr, Ming, with 90 percent of sub-sale transactions this year still making profits ranging between $3,620 and $1.92 million.