Buying in Sentosa Cove — at a discount to luxury homes on the mainland

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/ EdgeProp Singapore
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February 26, 2021 7:00 AM SGT
SINGAPORE (EDGEPROP) - Buying activity in Sentosa Cove has certainly picked up — especially in the second half of last year, post-”circuit breaker”, says Steve Tay, senior associate vice president of List Sotheby’s International Realty.
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Bungalows on Coral Island and Paradise Island with private berths along the waterway (Photo: Samuel Isaac Chua/EdgeProp Singapore)
“I see more local Singaporeans viewing properties for investment potential and also for their own occupation,” he observes. “At the same time, there has been an increase in permanent residents (PRs) looking to buy for own occupation as well.”
Most of the PRs looking to purchase for their own use are currently living in condominiums in the city, adds Tay. “They are attracted to the resort lifestyle of Sentosa Cove, as well as the prospect of owning a bungalow with more living space for the whole family, especially as more are choosing to work from home, amidst the pandemic.”
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The nationalities of the PRs are also more varied, notes Tay. “I have encountered Indonesians, Indians, Chinese, an Italian family, as well as other Europeans and Americans.”
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Tay: Most PRs are attracted to the resort lifestyle of Sentosa Cove, as well as the prospect of owning a bungalow with more living space for the whole family, especially as more are choosing to work from home, amidst the pandemic (Photo: Albert Chua/EdgeProp Singapore)
The majority of the foreigners who are viewing properties in Sentosa Cove have already been in Singapore since early 2020, prior to the pandemic, he adds. Since 2H2020, Tay has noticed an increase in the number of American high-net-worth individuals viewing villas in Sentosa Cove. “Some have flown in for business reasons, and have cleared the quarantine period,” he elaborates. “They are looking at houses to base their families while attending to their business matters in Singapore.”
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That is because prices in Sentosa Cove — Singapore’s premier waterfront residential enclave and located within the Core Central Region — look attractive compared to the mainland today. Even at $1,500 psf, the average price of a private villa at Sentosa Cove is lower than some of the average prices achieved at new condominium launches in the suburbs (Outside Central Region) such as Parc Clematis (average $1,630 psf) and Clavon (average $1,640 psf), says Han Huan Mei, List Sotheby’s research director. In the city fringe or Rest of Central Region, recent launches such as Avenue South Residence and The Landmark have average prices of $1,937 psf and $2,137 psf respectively, according to Han.
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Sentosa Cove is the only address in Singapore that offers seafront living on a resort island, with the enjoyment of space, serenity and security within a gated community (Photo: Samuel Isaac Chua/EdgeProp Singapore)

‘Seafront living’

“Moreover, Sentosa Cove is the only address in Singapore that offers seafront living on a resort island, with the enjoyment of space, serenity and security within a gated community,” Han comments. Based on URA caveat data, more than half the home buyers in Sentosa Cove are foreigners and PRs. Sentosa Cove is also the only address in Singapore where foreigners are able to obtain approval from the Land Dealings Approval Unit in order to purchase a bungalow for owner-occupation.
“Foreign investors have found assurance in the way the government responded to the Covid-19 pandemic in terms of its support and fiscal policies to businesses, job security and residents’ health and safety,” says Lewis Cha, List Sotheby’s executive director. “We can expect to see more well-heeled foreigners come to Singapore to set up businesses and to bring their families here once travel restrictions are relaxed.”
Based on the bungalow transactions in Sentosa Cove last year, the average price achieved based on land area was $1,724 psf, which is only marginally higher than the average price of $1,717 psf for the four bungalow deals in 2019, observes Han (see Table 3). However, bungalow prices depend on other factors besides location: there is also the orientation of the house, land size, built-up area, architectural details, quality of finish and the age of the house, notes Han. Most of the bungalows are individually designed, especially those along Ocean Drive and Lakeshore View in the North Cove, as well as Cove Way, Cove Drive and Cove Grove in the South Cove. “Some have orientation towards the sea, others towards the waterway or the golf course, and these factors will definitely affect prices,” adds Han.
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‘Psf price equivalent to Serangoon Gardens’

After all, there are only around 350 bungalows at Sentosa Cove, Tay points out. Some may argue that Sentosa Cove houses have 99-year leasehold leases. However, the bungalows on the mainland, especially the Good Class Bungalows in the prime districts, which are freehold, are restricted to Singapore citizens only, he adds. “They would have to become Singapore citizens in order to purchase houses on the mainland.”
Tay feels that prices in Sentosa Cove have taken a toll since 2011 when cooling measures included a hike in the additional buyer’s stamp duty (ABSD) for foreigners, which was at 10% in December 2011, increased to 15% in January 2013, and was hiked again to 20% in July 2018.
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Prices are now starting to recover as buyers recognise the value of these houses relative to those achieved at new apartments and condominiums in other parts of Singapore (Photo: Samuel Isaac Chua/EdgeProp Singapore)
In the heady days of 2010, there were 54 bungalow transactions in Sentosa Cove. The number of sales decreased to just three or four sales annually in 2015 and 2016, says Tay. There was a pick-up in 2017 with 10 bungalows changing hands. Following the latest hike in ABSD in July 2018, the following year saw just four bungalow deals (see Table 2). Average bungalow prices plunged from $2,998 psf a decade ago to as low as $1,100 to $1,200 psf for some transactions last year — the level of recent house transactions in the Serangoon Gardens estate, he notes.
Prices are now starting to recover as buyers recognise the value of these houses relative to those achieved at new apartments and condominiums in other parts of Singapore, says Tay.
Based on caveats lodged, so far there have been two bungalow transactions since the start of 2021. A house on Paradise Island sitting on a land area of 9,798 sq ft, changed hands for $12.7 million ($1,296 psf) in early February. The buyer is believed to be a Myanmar national. Another house on Ocean Drive, sitting on a land area of 9,042 sq ft, was sold for $13.3 million ($1,471 psf). The buyers are believed to be two Singaporean doctors.
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The higher average psf price achieved this year is due to two transactions at Seascape — the most premium of the 10 condominium projects in Sentosa Cove (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Condominiums – poised for recovery

Interest has also returned to condominiums on Sentosa Cove, and prices have also started to recover (see Table 2).
The higher average psf price achieved this year is due to two transactions at Seascape — the most premium of the 10 condominium projects in Sentosa Cove, in terms of design quality, finishes and fittings, and above all, in terms of its unblocked sea views, notes Han.
The two units at Seascape that were sold are 2,852 sq ft, four-bedroom apartments sitting on the sixth and seventh floors respectively. They were sold at $6 million each, or $2,103 psf. “It’s the highest psf price achieved since 2019,” says Han.
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“Putting side age and design, current prices of the condos at Sentosa Cove are deemed to be a bargain,” says List Sotheby’s Cha. One could find an apartment size of 1,200 to 1,300 sq ft, priced at around $2 million at Sentosa Cove. The equivalent at the latest launch, The Reef at King’s Dock at Keppel Bay on the mainland — just across the sea from Sentosa Cove — is priced over $3 million, he notes.
“The exclusive, tranquil and resort-like lifestyle at Sentosa Cove could not be replicated anywhere else in Singapore,” adds Cha. “It is attractive to retirees and families with grown-up children who do not need to be near schools.”