The Lost Decade of Sentosa Cove, Singapore's Billionaire Haven

By Pooja Thakur Mahrotri / Bloomberg | September 19, 2018 2:30 AM SGT
Sentosa Cove, a residential enclave nestled on an island off the coast of Singapore, is quiet at the best of times. On a weekday, its frangipani-lined streets are mostly devoid of life, save the odd domestic helper taking her four-legged charge out for a walk.
The stillness, however, belies the real estate shuffling taking place behind the scenes. Property listings here have been rising. But unless you’re buying, there’s no cause for celebration: sellers are stomaching losses as steep as 40 percent. Average prices are down almost 30 percent from their 2011 highs, a far more severe slump than in prime central London areas reeling from Brexit.
After years of predominantly loss-making transactions, the enclave on Sentosa island faces yet another blow, this time from the government’s decision in July to further raise stamp duties
As luxury real estate markets boomed across Asia-Pacific over the past decade -- from Hong Kong’s famed Peak to the seaside mansions of Sydney -- Sentosa Cove stands out as a rare cautionary tale about the perils of international property speculation. The hot money from a commodities frenzy that peaked about seven years ago has fizzled, and millionaires’ preferences have shifted toward other areas on Singapore’s mainland.
And now, after years of predominantly loss-making transactions, the enclave on Sentosa island faces yet another blow, this time from the government’s decision in July to further raise stamp duties.
No. of profitable transactions
% of profitable transactions
No. of transactions which broke even or made a loss
% of loss making transactions
2011
35
83
7
17
2012
39
85
7
15
2013
20
67
10
33
2014
9
43
12
57
2015
10
42
14
58
2016
8
32
17
68
2017
22
44
28
56
2018
15
54
13
46
Source: Cushman & Wakefield, Urban Redevelopment Authority
“Loss-making deals continue to plague the market,” said Christine Li, Cushman & Wakefield’s head of research for Singapore.“The recent cooling measures, coupled with the looming uncertainties arising from interest-rate hikes and trade tensions, will weigh on investor appetite in the near term.”
Private-home sales tumbled 64 percent in August to the least in six months as government cooling measures took effect, data released earlier this week from the Urban Redevelopment Authority showed.
What was previously Sentosa Cove’s main strength has lately become a liability. The area is the only...