Luxury homes at Sentosa Cove, Singapore. - Photo: Roy Issa
SINGAPORE (SCMP): For commodities trader Jerome Jung, mornings begin with a stroll along the waterfront at a marina where some of Singapore’s wealthiest residents dock their yachts.
The environs of Sentosa Cove make his daily hour-long commute to the city state’s central business district and back worthwhile, the 41-year-old says.
Jung and his wife, both from South Korea and permanent residents of Singapore, bought a three-bedroom condominium at Cape Royale two years ago. He acknowledges they are among a rare few who prioritise greenery over convenience.
“My case is a bit exceptional,” he said. “Most Koreans prefer to live in River Valley or Bukit Timah but we don’t have kids. If we did then it would be difficult to live here because there aren’t many schools.”
An aerial view of luxury homes in Sentosa Cove. The exclusive enclave is mostly made up of reclaimed land. - Photo: Reuters
Sentosa Cove, located on the eastern side of Sentosa Island, is renowned for luxury living. High-net-worth individuals can berth their yachts at ONE°15 Marina and enjoy a round of golf at Sentosa Golf Club. This exclusive enclave in land-scarce Singapore is made up of mostly reclaimed land, including five artificial islands named Coral, Paradise, Treasure, Sandy and Pearl.
However, unlike the rest of Singapore’s core central region, property prices in the 117-hectare Sentosa Cove have not been steadily climbing over the past two decades, despite it being the only place in the 750 sq km city state where foreigners can purchase landed homes – properties that include a title to the land on which the home sits.
Two decades after the launch of the first condominium in Sentosa Cove, The Berth, analysts who spoke to This Week in Asia said some homeowners such as Jung were still willing to pay high prices for quiet surroundings and a luxury postcode despite the lack of amenities and less-than-favourable price trends.
“It is as if Sentosa Cove is frozen in time from 20 years ago while mainland Singapore has moved on,” said Nicholas Mak, chief research officer at property search portal Mogul.sg.
He and other experts noted that accessibility and a lack of infrastructure – namely MRT stations, schools, shopping centres and hospitals – were a big part of the reason for stagnant prices in the area compared to Singapore’s core central region, where new amenities like MRT lines had popped up.
Resorts World Sentosa, one of two casinos in Singapore known alongside their associated hotels and shopping centres as integrated resorts. Photo: AFP
Currently, there is no MRT service directly into Sentosa Cove. Those without a car must rely on a shuttle bus from either Harbourfront on the mainland or the Beach Station of the Sentosa Express monorail.
In 2005, then-prime minister Lee Hsien Loong announced plans to develop two casinos and associated hotels and malls in Marina South and Sentosa to attract tourists. These would later become Singapore’s integrated resorts.
Sentosa Cove was modelled after Port Grimaud in the south of France, designed to cater to affluent foreigners and high-net-worth individuals who enjoy proximity to these casinos, Mak says.
“There was a lot of hype back between 2004 and early 2008 about the economic benefit of the integrated resort on the real estate market,” he said “In my opinion, the expected benefits ... on nearby residential real estate were overblown.”
Fast forward to the first eight months of this year, and the median price of private non-landed properties in Sentosa Cove was S$1,799 (US$1,375) per square foot, compared to S$2,122 in the rest of the core central region, according to Mak.
In a research paper published in April, Wong Shanting, head of research and marketing intelligence at ERA, noted that the average price per square foot in Sentosa Cove had peaked in 2010 at about S$2,300. But between 2014 and 2015, prices in the core central region surpassed those in Sentosa Cove.
Luxury boats and yachts on display during the Singapore Yacht show at ONE°15 Marina Club in Sentosa Cove. - Photo: AFP
Wong also reported that 62 per cent of non-landed buyers sold their units for a loss between 2013 and 2023, while the figure was 46 per cent for landed buyers.
In April this year, property developer Cityview Place Holdings slashed prices for units at The Residences at W Singapore Sentosa Cove by over 40 per cent from its initial sales launch in 2010, with 65 units selling at an average price of S$1,780 per square foot, according to The Straits Times.
Analysts highlight a dramatic decline in sales volume at Sentosa Cove, which plummeted from a peak of 543 units in 2006 to just 30 units in 2019. However, following the pandemic, there was a modest rebound, with 159 units sold in 2021 as more people sought attractive spaces for remote work.
New launches in 2022 and 2023 helped maintain transaction levels, with 113 and 95 sales being recorded in each respective year.
Analysts say enhanced cooling measures have deterred potential buyers, especially since Sentosa Cove is the only area in Singapore where non-resident foreigners are allowed to buy landed property.
In April 2023, the government doubled the additional buyer stamp duty (ABSD) to 60 per cent for foreigners, with Singapore citizens facing increased duties of 20 per cent for a second property and 30 per cent for a third.
Christine Sun, chief researcher and strategist at OrangeTee Group, noted that the new regulations have created challenges for sellers. “Since the implementation of the 60 per cent ABSD, there has been a noticeable drop in the number of private homes bought by foreigners, especially in Sentosa,” she said.
Customers dine at restaurants in the upscale Quayside Isle area of Sentosa Cove. - Photo: Roy Issa
As of Wednesday, only seven out of 112 buyers, or 6.25 per cent, were foreigners, Sun said – down from around one in five last year and about 17 per cent in 2022.
Mak noted that from 2004 to 2008, foreign buyers acquired 375 residential properties, representing 36.3 per cent of all transactions in Sentosa Cove.
Sun said that properties in Sentosa have historically been bought as second homes, holiday residences or investment assets, with heightened interest from foreigners during the 2007 property boom.
“However, implementing multiple regulatory measures targeting foreign buyers has resulted in a subsequent decline in demand. The elevated price points of properties within this locale, especially for larger units, are also outside the affordability of the average local buyer,” said Sun, adding that local investors have redirected their focus towards mainland Singapore, particularly the Downtown Core and Orchard districts.
ERA property agent Alvin Ng, who handles properties in Sentosa Cove, said that many of his foreign clients had been deterred by the ABSD. They prefer to wait until they or their children attain permanent resident status before making a move, he said.
Ng also noted that a high-profile case involving one of the 10 foreigners implicated in the S$3 billion money laundering case had affected buyer sentiment. In April, local media reported that OCBC Bank accepted an offer exceeding S$20 million for a plot of land in Sentosa Cove that previously belonged to Su Baolin – a convicted money launderer from Fujian who holds Cambodian nationality – after two attempts to auction the property.
“It feels like owners are afraid that Sentosa bungalows will be associated with negative news and that will prevent them from getting the house transacted in the market,” said Ng, adding that current buyers are primarily new permanent residents. Despite the challenges, homeowners in the area remain optimistic about a market rebound.
Propnex property agent Angelyn Tan said that buyers were drawn to the unique lifestyle that Sentosa Cove offers, including outdoor activities and yacht berthing opportunities. “It is a lifestyle that you cannot really find on the mainland.”
Looking ahead, the Sentosa-Brani Masterplan, announced in 2019, aims to redevelop the islands into a premier tourist destination as part of broader government efforts to revitalise the Greater Southern Waterfront.
“Since there are no plans to increase the number of residential units in Sentosa, the redevelopment is expected to yield positive effects on Sentosa Cove,” Wong said.
“Over the longer term, the development at the Greater Southern Waterfront could enhance amenities in the area and increase homebuyer interest in this area,” she added, emphasising that these changes will only unfold over the next one to two decades.
A Sentosa Cove resident who spoke to This Week in Asia on condition of anonymity expressed his contentment: “It feels like I’m living in a resort.”
The 59-year-old from Indonesia, who lives with his wife and two children in a landed home he bought 10 years ago, appreciates the security provided by the gated community.
When asked about concerns regarding the property’s value, given that all residential properties on the island are on 99-year leases, he said: “Everybody says that. But 99 years will become the norm.”
“Ninety-nine years will allow my kids to take over the house. It could even be enough for three generations since I don’t intend to sell.” - The Straits Times/ANN
