Luxury home selloffs to intensify as sellers’ fatigue sets in

HNWIs are on the lookout for fire sales.

The policy-battered luxury residential segment will continue to suffer selloffs this year, as desperate sellers painfully come to terms with selling their once-attractive trophy homes at vastly reduced prices.

According to a report by Colliers, investment sales emanating from the residential strata-titled sales segment, particularly in the luxury segment, are expected to pick up in 2015.

The residential sector topped the investment sales market in terms of total sales value in 2014. The sector hogged a market share of 36.3% last year, representing a total sales value of $7.59b. This figure is 26.9% less than the total sales value accumulated in 2013.

“Although the transaction volume in 2014 was lower than in 2013, investors comprising high net worth individuals (HNWIs) and family businesses are likely to keep a lookout for good-value opportunities in the sector on the back of prices softening. With prices expected to be better aligned between buyers and sellers, given the setting in of sellers’ fatigue amid a prolonged down-cycle that looks likely to continue into the new year, more sales from this segment could materialise in 2015,” stated Colliers.