Sentosa condo owners feel the blues

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An honorable member of the Coffee Shop Has Just Posted the Following:

Good morning brothers and sisters

another news to cheer you up if you are waiting for the bubble to burst

TWO in five Sentosa condominium units have been resold at a loss in the past year, symptomatic of the plight of luxury homes here, as financing restrictions put off buyers, industry watchers said. Since May last year, 31 units changed hands at six Sentosa projects: Marina Collection, Seascape, The Azure, The Berth, The Coast and The Oceanfront, according to data compiled by STProperty.sg from URA Realis. The findings were in line with data gathered by HSR Research, which shows resale prices in the plush Sentosa district falling by 25 per cent to about $1,800 psf in the first five months of this year, from around $2,400 psf over the same period last year. That said, the price movements tended to be volatile, given the single-digit number of transactions each month. There were five transactions altogether this year, with none last month, in March and in February. Of the 31 transactions in the past year, a profitability analysis could not be done for seven because caveats, which include information on purchase prices, were not lodged for the units. Profitability is calculated by subtracting purchase prices from selling prices. Of the remaining 24 transactions, 10 units were resold at a loss. Among the transactions which led to losses, four were for units at The Berth, the debut project at the Cove which was launched in 2004 and completed in 2006. Losses were incurred on transactions for three units at The Oceanfront, two at The Coast and one at The Azure. Two transactions in particular led to huge losses. A 2,982 sq ft unit at The Oceanfront was sold for $5.65 million ($1,895 psf) in November last year. It was purchased in April 2008 for $7.2 million ($2,415 psf). The loss was more than $1.5 million. A 2,820 sq ft unit at The Coast was sold for $4.8 million ($1,702 psf) in January this year, two years after it was purchased for $6 million ($2,128 psf). The loss was $1.2 million. SLP International executive director Nicholas Mak said that the sales could be due to owners struggling to find tenants for their units amid the weak leasing market. Some owners might have also not been able to secure high enough rental rates to service their loans. He said that most Sentosa homes were bought not for occupation by owners, but as an investment. "So they may find it a better option to just liquidate," he said, adding that the location was also not the most convenient for expatriates to commute to the mainland for work. Another industry watcher said that buyers who bought units at $2,100 psf and more appeared to have "overpaid". Those who profited from their resale deals mostly bought at lower psf prices; a handful even got their units at $800-, $900-plus psf back in 2006. --THE BUSINESS TIMES - See more at: http://news.omy.sg/News/Local-News/s....twMaCnI8.dpuf


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