Straits Times: Sat, Jun 16
ONCE a hot spot for well-heeled home hunters, Sentosa Cove seems to have lost a bit of its lustre amid sluggish sales and a general slowdown in the luxury home sector.
Property consultants attribute the change in mood to the lack of new launches on Sentosa, attractive deals elsewhere and foreign buyers being deterred by the additional buyer's stamp duty.
Since the start of last year, there have been about 30 transactions for landed homes on Sentosa, compared with 62 in 2010 alone, said Savills Singapore's research head Alan Cheong.
Including non-landed homes, there have been 101 transactions since last year, which pales in comparison with the 203 in 2010.
That year, The Residences at W and Seascape were launched.
'The lack of new launches doesn't create activity and sometimes dampens market interest instead,' Mr Cheong explained.
He added that some buyer interest has been diverted to other launches on the mainland.
'The sales at current launches have stalled because all the units with pro-sales attributes have been taken up,' he said.
Potential buyers may also have been distracted by good deals in prime districts 9, 10 and 11.
For instance, the 99-year- leasehold D'Leedon in Farrer Road is selling at an average $1,450 per sq ft to $1,600 psf, compared with Sentosa Cove condominiums which fetch more than $2,000 psf.
The recent imposition of cooling measures also had a 'significant impact' on foreign purchases, noted CBRE Research.
Mr Cheong said the slump in Sentosa Cove is 'part of an islandwide phenomenon for high-end homes'.
According to first-quarter property data from the Urban Redevelopment Authority, 1,559 uncompleted high-end private homes had been sold since last year. In 2010 alone, 3,946 units were sold.
'(It) does not reflect the loss of popularity of the island as an investment destination,' he said.
All Sentosa Cove homes are leasehold; the area is tracked by property observers as it is seen as an exclusive segment of the real estate market.
In the next couple of years, about 2,500 upscale private homes are expected to be ready in the area, noted Mr Nicholas Mak, research head at SLP International Property Consultancy.
But there are still unsold units at various projects. For instance, Seven Palms Sentosa Cove has more than 30 unsold units.
The Green Collection, a 20- unit strata-landed development, has not been launched.
'These are the last few and very exclusive. The developer probably wants to find buyers willing to pay exclusive prices, and also make sure there is enough interest first,' Mr Mak said.
Slow sales aside, prices at Sentosa Cove have held up, even though they dipped briefly during the 2009 recession.
Prior to that, prices rose steadily from 2004 and peaked in 2008, Mr Mak said.
In the first quarter of this year, the average transacted prices of landed homes and non-landed units were $2,135 psf and $2,418 psf, respectively. In 2009, they were $1,575 psf and $1,691 psf.
But fewer Singaporeans are buying Sentosa homes, he said. The proportion of foreigners has risen - possibly as it is far easier for them to buy landed homes there than on the mainland.
Overall, there is still interest in Sentosa properties, with some buyers willing to pay hefty prices to own a unit, experts said.
'I think the prices and sales at Sentosa Cove will go through the market cycle like the rest of the property market,' Mr Mak said.
'The stock of private homes (at Sentosa Cove) is limited. Also, it has some waterfront homes and there's a certain appeal to the address.'...
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Martin Koh/ Sherry Tang
Martin Koh/ Sherry Tang