Sentosa Cove Condos will continue to perform poorly without a major game changer
Do you want to live on an island resort? According to the prices of apartment homes in Sentosa Cove (located on Sentosa’s east coast in Core Central Region) and Sentosa’s eastern coastline, this idea is not likely to appeal much to locals.
Recent sales by a City Developments Ltd unit : C09, 0% of 65 homes at The Residences of W Singapore Sentosa Cove were at an average of S$1,780 (psf). This low rise condominium, located on Ocean Way, was finished in 2011 and is situated on 99-year-leasehold land. About 81 years remain.
Underperformance
The price of S$1,780 per square foot is significantly lower than that of many suburban homes. In fact, new condos sold in the Lentor region may be as high as S$2,100.
The Hill @ One North at Slim Barracks Rise has recently been launched. The units sold on the initial booking day have averaged S$2,595 per sq ft.
Based on the caveats filed, the average psf achieved for recent transactions at The Residences at W was about 36% below the S$2,793 for 20 transactions made in Q2 2010 at the time of the launch of the project.
Buyers at the initial launch of a product could face a large mark-to market loss.
The Residences at W might not have the latest design and it may be that the development has seen some wear.
A leasehold property value also drops as the number years remaining on the land lease decreases.
A land parcel that has 81 years left of its land lease, as calculated by the Singapore Land Authority when computing differential premiums is worth about 4.8 per cent more than one that has 99 years remaining.
In spite of this, buyers who initially purchased The Residences at W at the time have not fared well in comparison to those who bought private houses at around the exact same time.
Prices of non-landed homes have increased by 50% between Q2 2010, and Q1 2024
Private non-landed home values in the CCR are up 19%, according to Urban Redevelopment Authority price indexes.
The CCR Region underperformed primarily because foreigners, who aren’t permanent residents and investors, were particularly affected by the increased Additional Buyer’s Stamp Duty.
Today, foreigners who are not PRs and purchase a home pay 60 percent ABSD. Singaporeans pay ABSD at 20 percent for the purchase of a second house and 30 percent for the purchase of a third or subsequent home.
Game changer
The non-landed houses in the Bukit Tiah Road area of CCR continue to perform well, as they are attractive to Singaporeans buying homes for their own occupation.
Singapore citizens and PRs are charged ABSD of 0 percent and 5 percent, respectively, for their first home.
There were good sales at the private viewing in November 2023 for the freehold Watten House located in Bukittimah Road. UOL Group: U14 0%; Singapore Land Group: U06 10%, with an average of S$3,230/sf.
Can increasing the appeal of Sentosa Cove non-landed homes to locals for owner occupation help to improve their fortunes?
Sentosa can be a very unpleasant place for some delivery personnel. Sentosa has a poor transport connection compared to other areas of Singapore.
It remains a popular tourist destination. Sentosa is well connected to Singapore mainland via road, cable cars, pedestrian boardwalks and monorail.
Sentosa Cove might need an MRT to entice more locals to move there. Local homebuyers are known to prefer homes that are close to MRTs.
It could possibly house a well-established primary school as well as other top educational institutions. Sentosa offers a tranquil area that is different from mainland Singapore. Sentosa Cove could be transformed by the addition of a popular primary or secondary school.
Bukit Timah Road’s reputation as a neighbourhood with a variety of reputable schools and educational establishments is one reason why it is so popular among local homebuyers.
It’s true that many locals live single lives or are married but have no children.
These locals may choose to live in an area that is popular with families that have children, as they want to be able to rent out their home and sell it easily in the future.
Sentosa’s appeal as a destination will be enhanced by continued investment, like RWS’s expansion.
Sentosa Cove condominiums’ performance may not be boosted by the success of Sentosa Cove in attracting tourists with high-spending habits.
Tenants and buyers alike are becoming increasingly spoilt with choice as more private housing completions and launches take place. Could Sentosa Cove condominiums’ relative underperformance in comparison to other locations worsen further?
Buyers may not be interested in landed homes at Sentosa Cove. Despite recent high-profile sales of bungalows in District 10 and 69 Ocean Drive (which belonged to a foreigner arrested in a S$3 billion money-laundering case), the auction held last week for 69 Ocean Drive failed to attract a bidder. The only bidder was S$20 million, well below guide price of S$27.1million.
Sentosa Cove may require a major change in the ABSD system to attract more local residents to buy condos there. Many Singaporeans are not attracted to the idea of living in a residential community with an oceanfront marina.
Should there be a primary education in Sentosa?
Sentosa Island, off Singapore’s southern coast, is one of the most popular tourist destinations. Resorts World Sentosa, home to the Universal Studios Singapore themepark, Adventure Cove Waterpark, Sea Aquarium, and a Casino, is a major tourist attraction.
Sentosa has a wide range of accommodations, including hotels, food and drink outlets, shops and convention facilities. It also boasts beaches, a golf course of international standards, historical sites, etc.
Families looking to splurge can stay at Shangri-La Rasa Sentosa. Capella Singapore on Sentosa hosted the summit between then US president Donald Trump and North Korean Leader Kim Jong Un, in 2018. It is also popular with celebrities.
