POSTED: 06 Nov 2013 23:50 | CNA

SINGAPORE

Demand for luxury homes in Sentosa Cove may be softening but it is not losing its shine just yet.

Property experts said prices in Sentosa Cove are set to make a rebound, even hitting previous highs seen in 2008 before the global financial crisis.

The upbeat sentiment came following a report by Colliers International on Tuesday which said Sentosa Cove properties are now cheaper than mass market condominiums.

The sun, the sea, and the serenity are among the factors that lure home buyers to snap up properties in Sentosa Cove.

For some, Sentosa Cove also offers a perfect lifestyle and their purchases are not just for investment.

Sentosa Cove is also the only place where foreigners can own landed property without any restrictions in Singapore.

Samuel Eyo, director at Savills Singapore, said: “It is for different kind of people who want to live in Sentosa Cove, and for foreigners who love to stay in Singapore but don’t want to stay too much in concrete areas like Orchard Road. For those who work from home like hedge fund managers, they would love to stay there because of the proximity to town and yet, they can enjoy the sea breeze and sun where you can’t enjoy on Orchard Road.”

Property prices and rental yields for Sentosa Cove properties have been on the decline.

The latest report by Colliers said the difference in prices between condominium units there and those located in the mainland’s Outside Central Region (OCR) is now at a historically low level.

The median price of condominium units in Sentosa Cove in the third quarter this year being just 26 per cent higher than the S$1,311 psf median price of 99-year leasehold mass-market condominiums located in the suburbs.

Analysts said the dip in rental yields for Sentosa Cove properties have also prompted investors to shun high-end waterfront marina residential properties.

Public transport on the mainland is more accessible than on Sentosa, making private transport vital for residents in Sentosa Cove to get around.

But getting a car just to get around would be a substantial cost in addition to the stamp duties imposed to cool the property market.

Analysts do not see loan curbs as a hindrance because buyers of Sentosa Cove are typically cash-rich.

Still, some analysts said Sentosa Cove properties should offer high net worth individuals better capital appreciation potential compared to similar developments in other cosmopolitan cities.

But for property prices to recover, various cooling measures, especially the additional buyers’ stamp duty (ABSD) must be removed.

Colin Tan, CEO at Vestor Realty, said: “Our high end residential homes are artificially deflated. If you are looking at S$1,646 per sq ft in Sentosa, that is ridiculously low in my opinion. In Hong Kong, Kowloon West, properties there in the high end area has already reached HK$40,000 psf – that is about four times more than in Singapore.”

Expected to be fully developed by 2014, Sentosa Cove will house over 2,100 homes comprising condominiums, terrace houses and bungalows.

All homes on the island are sold with a 99-year or 103-year leasehold tenure.

Market experts said such limited supply of homes on Sentosa Cove will help support prices.

– CNA/xq

http://www.channelnewsasia.com/news/business/singapore/analysts-say-sentosa-cove/877074.html