Plunge in luxury home prices leaves eerie silence in Sentosa Cove

No thanks to lending restrictions and taxes.

A report by Reuters details how lights have turned off on Singapore’s billionaire row as luxury house prices slump as if there is a global financial crisis.

Reuters says that prices in the gated community in Sentosa Cove, the only place in the country where foreigners can buy landed property, fell around 20% in the past year as lending restrictions and taxes on foreign buyers burst a bubble in the Southeast Asian financial hub’s luxury real estate market.

Sentosa Cove was developed in the early 2000s at a time when Singapore was actively courting the world's wealthy to its shores. It sprang up along with other luxury developments near Singapore's glitzy Orchard Road shopping district.

In 2004 the country's central bank launched the Financial Investor Scheme (FIS) that allowed foreigners with a global net worth of S$20 million ($15.99 million) to become permanent residents 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.

View the full report here.