Some analysts believe the high transaction volumes in Sentosa is a spillover from the growing demand for luxury homes within the Rest of Central Region (RCR), considering that prices on the island remain relatively lower compared to those on the mainland.
Sentosa Cove saw home sales hit a new benchmark during the first eight months of 2021, reported The Straits Times (ST).
Urban Redevelopment Authority (URA) data showed that there have been 103 transactions on the exclusive island as of 16 August – comprising 85 condominiums and 18 landed homes – or up 84% from the 43 condominiums and 13 landed homes shifted during the whole of 2020.
The sales for this year amounted to $610 million, or up 72% from last year.
Some analysts believe the high transaction volumes in Sentosa is a spillover from the growing demand for luxury homes within the Rest of Central Region (RCR), considering that prices on the island remain relatively lower compared to those on the mainland.
Overall private property prices in Singapore rose 4.1% in H1 2021, and 7.1% in H2 2021, revealed URA data.
Nicholas Mak, Head of Research and Consultancy at ERA Realty, said the hike in property prices on the mainland “makes the resale prices in Sentosa Cove look relatively attractive”.
He noted that the high transaction volume this year could lead to a price recovery for Sentosa homes.
“Based on overall market trend, Sentosa Cove property still has some room to run,” he said as quoted by ST.
Sentosa Cove started as a residential zone in 2006, making it the only enclave in Singapore where foreigners are allowed to acquire landed property, subject to approval.
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The island has 2,160 homes, which range from high-rise condominiums to luxury bungalows that come with adjoining private berths for boats.
Sentosa Cove’s ultra-posh waterfront enclave has been home to high-profile entrepreneurs and celebrities.
In 2020, home-grown beauty brand Bioskin founder, Mathilda Koh, who lives in a two-storey bungalow overlooking Serapong golf course, acquired a unit at Seascape for $3 million, or $1,327 per sq ft (psf). This is way lower compared to the $6.26 million paid by the seller in 2010.
Condominium prices on the resort island have dropped by about 40% since its peak in 2010, while landed home prices started to decline in 2016.
However, Sentosa Cove prices have been on the uptrend since 2020, with Singaporeans accounting for half of buyers this year.
In May, the wife of DBS Bank Chief Executive Piyush Gupta snapped a three-bedroom condominium for $3.45 million or $1,705 psf – up from the development’s average psf price of $1,500.
An 8,384 sq ft landed home was sold for $20 million or $2,385 psf last month. The figure is higher than the average psf price of $1,841 for landed homes this year.
ST noted that condominium prices now stand at about $1,500 psf to $1,600 psf, up from last year’s average of $1,484 psf.
The median transacted price for District 4 and the Central Region is about $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 16 August this year, more than half recorded a loss,” said ST.
Units at projects such as Seascape and Turquoise registered more losses when they were transacted following the introduction of cooling measures.
Nonetheless, property agents have been receiving more sale and rental inquiries since 2020.
They pointed to the COVID-19 pandemic as a key reason for Singaporeans increased interest for Sentosa Cove homes.
“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,” said Nicole Teo, Senior Associate Group Director at OrangeTee & Tie.
“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,” he said as quoted by ST.
“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.”
But despite the increased demand, some Sentosa Cove owners decided to keep their homes as they generate good rental yields, said PropNex Associate District Director Alex Low.
“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 as quoted by ST.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
