SINGAPORE (April 3): Singapore’s recent unwinding of some property curbs, which initially appeared to boost prospects for developers, may instead be creating new problems.

After regulators closed a tax loophole that allowed developers to offload apartments in bulk to institutional investors and wealthy Singaporeans, many of the city’s builders now face an unpalatable choice: discount unsold luxury homes or pay stiff penalties for missing government-mandated sales deadlines.

Opting for discounts could push home prices even lower, prolonging a three-year slide in property values. The alternative could be even more costly. About 2,098 homes remain unsold in 57 projects and penalties on these could total about $647 million this year, according to industry estimates based on official data.

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