Sales of homes in Sentosa Cove soar to new heights

103 transactions this year till Aug 16, up 84% from whole of last year; total takings at $610m

Aug 29, 2021

A second floor unit for sale at The Oceanfront in Sentosa.

SINGAPORE - Sales of apartments and houses in Sentosa Cove hit record heights in the first eight months of the year, racking up multimillion-dollar takings in the process.

There have been 103 transactions this year until Aug 16 - for 85 condominiums and 18 landed homes - a new benchmark and 84 per cent up on the 43 condos and 13 landed homes sold for all of last year, according to data from the Urban Redevelopment Authority (URA).

Those sales amounted to $610 million, 72 per cent more than last year.

Some analysts said the high transaction volumes in Sentosa could be a spillover from the rising demand for luxury homes in Singapore's rest of central region, given that prices on the exclusive island were still relatively lower than those on the mainland.

URA data released last month showed overall private property prices rose 4.1 per cent in the first half of this year, and 7.1 per cent year on year in the second quarter of this year.

Mr Nicholas Mak, ERA Realty's head of research and consultancy, said: "The increase in property prices on the mainland makes the resale prices in Sentosa Cove look relatively attractive."

He added that the high volume of transactions this year could see a price recovery for Sentosa Cove homes. "Based on overall market trend, Sentosa Cove property still has some room to run," he said.

Sentosa Cove, which began as a residential zone in 2006, is the only enclave where foreigners can buy landed property, subject to approval.

The area has 2,160 homes ranging from high-rise condominiums to luxury bungalows with adjoining private berths for boats, all aimed at the ultra-rich with its resort-living lifestyle.

The ultra posh waterfront enclave of Sentosa Cove has been home to celebrities and high-profile entrepreneurs.

Last year, Ms Mathilda Koh, founder of home-grown beauty brand Bioskin, who lives in a luxurious two-storey bungalow overlooking Serapong golf course, paid $3.1 million, or $1,327 per sq ft (psf), for a unit at Seascape, well under the $6.26 million the seller paid in 2010.

The view from the balcony of a penthouse unit at the Seascape condominium in Sentosa.

Condo prices on the resort island have tumbled about 40 per cent since their peak around 2010. Landed home prices also started falling in 2016.

But prices in Sentosa Cove have been on an upward trend since last year. Half of the buyers this year are Singaporeans.

In May, DBS Bank chief executive Piyush Gupta's wife paid $3.45 million, or $1,705 psf, for a three-bedroom condo unit - well up on the average $1,500 psf for the development.

Last month, an 8,384 sq ft landed home was sold at $20 million, or $2,385 psf, higher than the average $1,841 psf transacted for landed property this year.

Condo prices now hover around $1,500 psf to $1,600 psf, up from an average of $1,484 psf last year.

The median transacted price for the central region and District 4 is around $1,800 psf.

A Sunday Times analysis of URA caveat information showed that of the 23 units sold at The Oceanfront in Sentosa Cove from January to Aug 16 this year, more than half recorded a loss.

The Oceanfront in Sentosa.

Units at projects like Turquoise and Seascape, which were sold at much higher prices in 2007 and 2010, hovering around $2,600 psf, inevitably saw more losses when they changed hands after cooling measures were introduced.

Property agents have been getting more sale and rental inquiries since last year.

The Covid-19 pandemic is a key reason more Singaporeans have been looking at Sentosa Cove homes, they said.

Ms Nicole Teo, senior associate group director at OrangeTee & Tie, said: "After a few years of languishing in the property market due to the introduction of ABSD (additional buyer's stamp duty) for foreigners, it's Sentosa's moment in the sun now.

"We're seeing a significant increase in inquiries and also viewings for Sentosa properties.

"The experience of lockdowns and the prospects of restricted movements in the future, coupled with the work-from-home trend becoming a norm - all these are working in favour of Sentosa Cove.

"Suddenly, inconvenience is no longer an objection as people no longer need to travel in and out to the office every day. In fact, being on an exclusive island away from the congested main island is a safer and more attractive idea now."

PropNex associate district director Alex Low said that despite the high demand, some property owners decided to keep their units as they generate good rental yields.

"There are no new projects launching in Sentosa. Stock is limited. Unlike in the past when there were many vacant units, nowadays we get a new tenant even before the lease ends," he said.

OCBC Bank chief economist Selena Ling felt that record-low interest rates coupled with strong household liquidity could have underpinned local demand, despite the pandemic.

She is doubtful that the buying frenzy could spark more cooling measures. "Sentosa properties are really in a different league and appealing more to foreign rather than local demand," she said.

"So even if there is spillover demand from the rest of central region, policymakers are more focused on the domestic market dynamics."