The owner of a Sentosa apartment booked a huge loss after buying the property at luxury home prices and selling it around the rate of a mass-market home.
The 2,626 sq ft unit at The Coast at Sentosa Cove, a luxury condo of 249 apartments in the millionaire enclave, went for just $3.125 million - or $1,190 per sq ft (psf).
That translates to a loss of $1.215 million for the owner, who snapped up the property for $4.34 million - or $1,653 psf - on March 8, 2007, according to caveats lodged with the Singapore Land Authority.
It is also likely to be the cheapest transaction on the island in recent years and the steepest loss among the 18 unprofitable transactions racked up at the Ho Bee Group condominium so far, according to online property portal Square Foot Research.
In fact, it is almost on a par with some mass-market homes. At Kovan Residences, for instance, a 2,196 sq ft unit was sold for $1,010 psf last month.
The Straits Times understands that the owner, a British national working in finance, sold the unit because he had plans to return home.
The price might seem like a "bargain basement price" in psf terms, said Mr Donald Han, managing director of Chestertons, but it still works out to a sizeable quantum.
"Not many people can afford a $3 million property, hence the dearth of buyers in the market and perhaps the speed that the seller required to transact could have led to such a low price," he said.
Forced sales of two units in Turquoise, another Sentosa Cove condo, at almost half their original value last year also surprised the market and indicated that banks were forcing more cash-strapped owners to offload property to meet loan shortfalls.
Luxury homes sold at large losses have been sporadic and isolated to selected projects, primarily in Sentosa, but signs are emerging that developments in the prime districts of nine, 10 and 11 are being hit as well. At Suites @ Newton in Surrey Road, a low of $1,133 psf was racked up for a 1,324 sq ft unit at the 67-unit development in November.
The luxe St Regis Residences Singapore in Tanglin sold units of 3,897 sq ft and 4,941 sq ft at an average of $1,923 psf in January, setting a low for the project and underscoring a closing gulf between luxury and mid-tier homes.
Cushman & Wakefield research head Christine Li noted that average psf prices of a typical high-end condo unit were 2.4 times that of those in the mass market in 2007. That multiple has since shrunk to 1.7 times.
However, Mr Han reckons that the luxury market could be hitting the bottom soon. Freehold land in prime districts is worth between $1,800 psf per plot ratio and $2,000 psf per plot ratio, and units priced below $2,000 psf on strata area are effectively sold at land value. "Price-point wise, it's hard to see luxury prices getting even lower than what they are today," he said.