Here's why analysts are pessimistic about number of unsold luxury homes declining by 10% in 1H

At least 6 projects engage in a deferred payment scheme.

The number of high-end inventory has started to come down in the 1H of 2016 but it does not necessarily reflect a healthy demand, says Jefferies.

According to Jefferies, high –end inventory has started to come down by 9.6% to 7,603 units from January to June this year compared to last year's 8,417 only because developers started to cut price and engage in deferred payment scheme.

Hallmark Residences by MCL cut down its prices while projects including OUE Twin Peaks by OUE, Ardmore Three by Wheelock Properties; d'Leedon and The Interlace by CapitaLand; Hilltops by SC Global; and Lloyd SixtyFive by TG Development.

Jeffereries notes that they have reservations about the scheme and they believe that not all banks are participating in the scheme.

"The regulator has sent a circular on how to calculate loan amount for such schemes but it is not in public domain. We worry about valuation changes when the bulk of payment comes due in couple of years," the research firm said in a report.