Sentosa Cove, the man-made island resort in Singapore, is the only place in the country where foreigners can buy landed property.<\/p>\n
However, dozens of houses on the area, with their own private yacht berths and swimming pools, are empty while only a few of the apartment blocks overlooking the marina have residents.<\/p>\n
The past year has seen a fall of 20% in the price of property in Sentosa Cove as lending restrictions and taxes on foreign buyers rose in the Southeast Asian luxury real estate market.<\/p>\n
The investors are seeing a fall in the value of their assets, while developers are struggling to sell property even after the recent price falls. Several real estate websites list hundreds of bungalows and flats for sale, however only 12 apartments and a house have changed hands in the past one year, according to Urban Redevelopment Authority (URA). \u201cThe way prices have fallen in Sentosa, it\u2019s as if there is a global financial crisis,\u201d said Alan Cheong, head of Singapore research at property firm Savills.<\/p>\n
Unless policy restrictions are eased, this could imply a difficult 2015 for the city state\u2019s banks. However this seems unlikely because these government-imposed restrictions are effective in keeping the broader market in check after the prices of private house increased by more than 60% between 2009 and 2013.<\/p>\n
New mortgage business at Singapore\u2019s lenders is now 40% below 2013 levels, although the downfall will not show up in their balance sheets for the next one year since loans are often agreed a year in advance.<\/p>\n
Another problem for property investors is the cutback in housing allowances for expatriate workers, implying a fall in rent price. There has also been a drop in the number of high-net-worth foreigners being granted permanent residency.<\/p>\n
Real estate agent Knight Frank analysed property prices of 32 cities around the world and found that Singapore\u2019s prime residential market, which had been the priciest 5% of properties, had performed the worst in the first half of 2014, with prices falling by 7.3%.<\/p>\n
In the luxury sector, the government restrictions have led to a sharper fall in the number of foreign buyers, who accounted for more than half of Sentosa\u2019s sales between 2010 and 2014. This implies that the number of distressed investors is expected to rise. \u201cSome of the earlier buyers are likely to have bought at prices 20% to 30% above current prices,\u201d said Christine Li, head of research at property consultancy OrangeTee.<\/p>\n
\u201cThe rental can\u2019t even cover the mortgage for these high-end investments \u2013 they want to offload but there are no takers.\u201d<\/p>\n
Last month, United Overseas Bank reported a doubling in its bad debt charges for the second quarter. They reported that a group of investors was struggling to service high-end property loans.<\/p>\n
According to real estate agency Colliers, the number of residential properties put up for sale at auction (by banks after buyers defaulted on mortgages) quadrupled to 64 in the first half of 2014. \u201cThis is different from previous years, when owners\u2019 sales dominated auctions,\u201d said Joy Tan, head of auctions at DTZ. \u201cThe tables have turned and we expect more mortgagee sales on the way.\u201d<\/p>\n
In July this year, a four-bedroom apartment in Sentosa’s Turquoise condo was sold at an auction for about S$1,400 per square foot. Whereas in 2012, a similar flat would have fetched S$2,450 per square foot. This year only one house was sold in Sentosa \u2013 a six-bedroom apartment on the \u201cTreasure Island\u201d \u2013 for about S$17 million. Its price in 2012 was S$20.2 million.<\/p>\n
It is believed by many in the luxury property industry that foreign buyers might have gone for good. City Developments Ltd, Southeast Asia\u2019s second-largest residential property developer, said that foreign buyers have \u201cshifted and are still shifting their investments to markets outside Singapore\u201d.<\/p>\n
Sentosa Cove was developed in the early 2000s when Singapore was actively propagating to the world\u2019s wealthy to come to its shores. In 2004, Singapore\u2019s central bank launched the Financial Investor Scheme (FIS) which allowed foreign nationals with a global net worth of S$20 million ($15.99 million) to become permanent residents of Singapore if they parked S$5 million (raised to S$10 million in 2010) in Singapore, S$2 million of which could be put into property.<\/p>\n
However this scheme was scrapped in 2012 as the government struggled with growing public discontent over immigration, and a spike in property prices.<\/p>\n
\u201cSentosa happens to be a development targeted at a time when the world was leveraging up but now that we have deleveraged, there is a much smaller pool of people who can afford it,\u201d Savills\u2019s Cheong said.<\/p>\n
Source<\/strong>: themalaysianinsider.com<\/p>\n","protected":false},"excerpt":{"rendered":" Sentosa Cove, the man-made island resort in Singapore, is the only place in the country where foreigners can buy landed property. However, dozens of houses on the area, with their own private yacht berths and swimming pools, are empty while only a few of the apartment blocks overlooking the marina have residents. The past year…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"footnotes":"","_jetpack_memberships_contains_paid_content":false,"jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[454],"tags":[],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p8hnWW-CN","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/posts\/2405"}],"collection":[{"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/comments?post=2405"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/posts\/2405\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/media?parent=2405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/categories?post=2405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentimmigration.com\/wp-json\/wp\/v2\/tags?post=2405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}