In 2023, Sentosa Cove experienced a 28.9% year-on-year decline in condo transactions, contrasting with a 5% increase in median prices – a trend that is garnering significant attention in the Singapore Property News scene.
Despite its unique waterfront living and resort lifestyle appeal, luxury 99-year leasehold condos in Sentosa Cove have faced stiff competition from new leasehold condos on the main island over the past decade. According to Han Huan Mei of Sotheby’s International, this is primarily because there hasn’t been a fresh supply to recalibrate condo values in Sentosa Cove. She further explains, “Moreover, property price tends to drop as leasehold tenure drop.”
The pioneer of Sentosa Cove, The Berth by the Cove, was completed in 2006 with a 99-year lease from March 2004. A recent transaction at The Berth involving a 3,046 sq ft penthouse on the sixth floor sold for $3.25 million ($1,067 psf) in November, compared to the previous purchase price of over $2.2 million ($725 psf) in February 2005. This transaction took place shortly after the project’s launch in November 2004, with approximately 97 units sold at a median price of $847 psf in the following two months.
A notable addition to Sentosa Cove’s condo landscape in 2022 was Cape Royale, a 302-unit development. The development garnered significant interest, with 46 units sold at a median price of $2,174 psf by the end of December 2022. In 2023, another 40 units were sold at a median price of $2,225 psf, contributing to Cape Royale’s status as the top-selling project in the enclave. Cape Royale was completed in 2013 with a 99-year lease from 2008.
At Marina Collection, a 3,272 sq ft ground-floor unit facing the marina changed hands for $5.726 million ($1,750 psf) in November. This luxury condo, consisting of 124 units, was completed in 2011 with a 99-year lease from 2007.
In December, a four-bedroom unit at The Oceanfront @ Sentosa Cove was sold for $3.65 million ($1,775 psf), a significant appreciation from its purchase price in July 2006, further highlighting the potential of Sentosa Cove properties. The Oceanfront consists of 264 units and was completed in 2010 with a 99-year lease from 2005.
Meanwhile, a three-bedroom unit at Turquoise was sold for $3.38 million ($1,562 psf) in December. The 91-unit Turquoise has been experiencing renewed interest.
The Residences at W Singapore saw its first transaction in nine years, with a two-bedroom unit selling for $2.2 million ($1,747 psf) in September 2023. The last transaction occurred in October 2014 when a similar unit fetched $3.64 million ($2,891 psf). This resurgence in activity can be attributed to City Developments’ launch of a $1.5 billion profit participating security investment platform in December 2014.
Despite being considered part of the Core Central Region (CCR), Sentosa Cove’s median price of $2,125 psf in 2023 is in closer alignment with prices in the city fringe or the Rest of Central Region (RCR). This is due to the generous sizes of luxury condo units in Sentosa Cove, ranging from 1,200 sq ft for two-bedroom units to 3,000 sq ft for three- and four-bedroom apartments. While psf prices may appear lower compared to newer condos on the main island, the quantum prices are considerably higher.
Foreign buyers, in particular, are drawn to the waterfront living and resort lifestyle offered by Sentosa Cove. However, the hefty 60% Additional Buyer’s Stamp Duty (ABSD) imposed on foreign buyers necessitates more competitive pricing to attract them. If prices become attractive, local investors may also consider acquiring properties in Sentosa Cove for holiday homes or rental income.
The proportion of foreign and permanent resident (PR) buyers saw fluctuations in recent years, influenced by factors such as the Covid-19 pandemic and changes in ABSD rates. In 2019, before the pandemic, foreign and PR buyers constituted over 20% each of all buyers.
During the pandemic (2020–1H2022), foreign buyers dropped to under 10% due to border closures. However, when Singapore reopened its borders from 2H2022, the proportion of foreign buyers recovered to 16%. In 2023, the proportion of foreign buyers rebounded to pre-Covid levels of 22%, while PR buyers increased to 32% during the same year.
Condo transactions in Sentosa Cove saw a 28.9% year-on-year decline in 2023, accompanied by a 26.1% decrease in total sales value, which amounted to $382.28 million. Despite these transaction challenges, the median price increased by about 5% year-on-year to $2,125 psf based on URA data as of December 31, 2023.
In comparison, the overall transaction volume of non-landed property in the CCR declined by 20% year-on-year as of December 27, 2023, a smaller contraction than Sentosa Cove’s 29%. This difference could be attributed to consistent support from local buyers who prioritize convenience and proximity to amenities on the main island.
The government’s stance remains unchanged regarding residential supply at Sentosa Cove, but ongoing improvements to Sentosa Island’s amenities and infrastructure are expected to positively impact Sentosa Cove in 2024. A gradual recovery in condo sales volume is anticipated as price corrections take place, attracting both foreign and local buyers to invest in this unique enclave.
