A high-end disaster: Avoid Singapore’s residential market, investors told

Prospects remain dim for this sector.

Luxury residential properties were hardest hit by the government’s property cooling measures. Data released in past quarters show an unprecedented plunge in transaction volumes, while some high-end homeowners have even defaulted on their debts.

Against this bleak background, one fund manager interviewed in PwC and the Urban Land Institute (ULI)’s Emerging Trends in Real Estate Asia Pacific report stated that "Residential in Singapore is the market with the avoid sign at the moment."

The report further stated that the true extent of luxury price declines is extremely difficult to determine. Some reports estimate that prices are down some 20% since their 2012 peak, and even as much as 40% on Sentosa Island.

“By contrast, in Singapore the introduction in mid-2013 of cooling regulations involving restrictions on bank lending and higher stamp duties has produced modest price declines in the broader market, and a "disaster" at the high end. The true extent of the decline is hard to measure because "there are just no transactions, so people can ask what they want, but who knows what the real price might be?" with few transactions, looming oversupply and a government committed to lower prices, prospects remain dim,” noted the report.