S$1.65m can get you a home on Sentosa

As prices have fallen since 2007 peak, more Singaporeans have snapped up homes on resort island

Mon, Nov 09, 2020

Siow Li Sen


STAYING on Sentosa may seem literally like a distant idea, but more Singaporeans are seeing the virtue of getting away from the bustle of the city.

In the second half of this year, more locals have snapped up homes on Sentosa, where a 1,100 sq ft apartment can be had for about S$1.65 million.

Buyers who don't mind the commute are finding that some Sentosa units now cost less than half what they did during the peak in 2007.

Recent figures show that sales activity for both landed and non-landed homes in Sentosa are picking up, reflecting buying interest by Singaporeans in the second half of the year, said Lam Chern Woon, Edmund Tie senior director, research and consulting.

Total deals in Sentosa since the start of this year to Nov 3 stood at 41 units, said Mr Lam. This already exceeds the 30 transasactions for the whole of 2019. Over the past 10 years, the high was 204 in 2010 and the low was 27 in 2014, he said.

Singaporeans made six purchases in August this year alone, pushing the nine-month tally of properties purchased by Singaporeans to 26. This means Singaporeans are on track to make up a big chunk of the purchases this year. This also compares against the 27 properties purchased by Singaporeans in all of 2019.

A number of the transactions involved non-landed homes priced at about S$1,400 per square foot (psf), said Mr Lam. Non-landed transactions this year were concentrated in three projects: The Oceanfront @ Sentosa Cove, The Coast at Sentosa Cove, and The Berth by the Cove.

A number of the S$1,400-plus psf transactions were for units at The Oceanfront @ Sentosa Cove and The Coast at Sentosa Cove. The Berth by the Cove had a number of deals below S$1,400 psf.

"I would say this offers a fairly attractive price point for foreigners and Singaporeans alike. From an investment angle, it offers a fairly safe entry point while awaiting future catalysts such as the expansion of Resorts World and the revitalisation of Greater Southern Waterfront," said Mr Lam.

"From an owner-occupier angle, it offers an idyllic lifestyle but the market segment is probably a very niche market," said Mr Lam.

The two cheapest Sentosa homes sold this year in terms of absolute price were at The Berth By The Cove. Both were 1,141 sq ft units. One sold in February for S$1.65 million, or S$1,446 psf. The other was sold in July for S$1.7 million, or S$1,490 psf.

On a psf basis, the cheapest transaction was a 2,045 sq ft unit at The Berth by The Cove, which was sold for S$2.32 million, or S$1,134 psf, in mid-Oct. Separately, a 1,884 sq ft unit at The Azure was sold in August for S$2.25 million, or S$1,194 psf.

The highest psf price achieved at The Azure was for a fifth-floor unit spanning 162 sqm that was transacted at S$4.2 million, or S$2,400 psf, in August 2007, said Christine Sun, OrangeTee & Tie head of research & consultancy

The highest psf price at The Berth was for a third-floor unit spanning 177 sqm that transacted for S$4.2 million, or S$2,200 psf, in November 2007, said Ms Sun.

"Prices may have fallen as a result of slower demand for private homes in the Sentosa area over the past few years," said Ms Sun.

This could be attributed to a lack of new launches in the area, she said.

There are many new projects launched in the other prime areas like Districts 1, 2, 9, 10, and 11 in recent years.

"Many of these are premium units with attractive design, nice facade, well-located and built by reputed developers. Therefore, the release of many choice units in other areas could have drawn buyers away from the Southern Island," said Ms Sun.

Recent Sentosa buyers could also be looking at retirement living.

"I would not mind staying in Sentosa as a retirement lifestyle, but probably not when I have to brave the slow and long drive with multiple speed cameras from the residential enclaves in Sentosa to (my) workplace in town frequently," said one professional.

In the beginning, Sentosa was popular among foreigners as it is the only place in Singapore where there are no restrictions for foreigners, especially for those looking for landed property.

Prices rose - but then took a hit more than five years ago. The property market turned in 2013 with the introduction of cooling measures such as the total debt servicing ratio (TDSR). Since then, said Mr Lam, Sentosa has been somewhat forgotten especially as controls on the outflow of capital from China were introduced in late 2016.

Landed homes there continue to be popular among foreigners. They are going for about S$1,100 psf to over S$2,000 psf this year, with those along Cove Drive/Grove being most pricey. Those at the east end, such as Paradise Island and Coral Island, are transacted at the lower end, he said.

The Business Times reported in September that at least 10 villas had been transacted in the first nine months of the year - including deals for which buyers had not lodged caveats. This is up from six transactions last year, according to agents.

At least two further deals are currently pending while awaiting approval, the report said.

Sentosa Cove is the only place in Singapore where a foreigner who is not a Singapore permanent resident may seek approval to buy a landed home for his or her own use.

List Sotheby's International Realty (ListSIR) senior associate vice-president Steve Tay forecasts that 2020 could end with at least 15 deals in this segment, given the current level of viewing activity by potential buyers looking for a home for owner occupation.

"These comprise a good mix of nationalities, not only buyers from China but also Indonesia, Malaysia, India and Singapore."

This year's tally includes three bungalows on Pearl Island, one of five man-made islets in Sentosa Cove, which were transacted in August and earlier this month at between S$16 million and S$21 million each.

These are net prices (excluding discounts and incentives such as furniture provided by the developer in show units) and work out to S$1,725 psf to S$2,000 psf on land areas of about 9,270 sq ft to 11,667 sq ft.