The hype of owning a Sentosa home for the affluent started in 2004. It was a symbol for the rich to show “they have arrived”. Sales peaked in 2006 with 522 transactions.
But the buzz died down after the Global Financial Crisis (2007-8). In fact, the government sold no new land parcel after 2008. From 2011, several rounds of ABSD introduced quickly killed the demands from foreigners for Sentosa, the only place they can buy landed homes in Singapore.
And we kept reading bad news of Sentosa Cove homes in the media.
Marina Collection
In late 2007, developer Lippo Group launched the 124-unit Marina Collection wat $2,600 to $2,800 psf. Prices have since dropped to $1,600 to $1,800 psf. By March 2011, 38 out of 42 owners defaulted. Then UOB sued the developer for inflated selling prices with furniture rebates up to 34.5 percent of purchase prices. UOB sought to recover S$181 million inflated housing loans disburse and was awarded $17.7 by the court.
The Residences at W Singapore Sentosa Cove
In 2010, CDL launched 228-unit The Residences at W Singapore Sentosa Cove with just 20 units sold. It was relaunched 14 years later in April 2024. A generous 40 percent price cut cleared only 65 units.
The Coast at Sentosa Cove
In 2013, over 100 owners of The Coast sued developer Ho Bee for construction and maintenance defects, including termite-infested pool decking, flooded staircases, cracks on the ceilings, walls and floors. At the end, the parties decided to resolve the case out of court.
Cape Royale
Ho Bee only put up Cape Royale for sale nine years after its completion. Units were asking for an average price of $2,300 psf. On 6 July 2022, The Business Times reported that Cape Royale “moved about 50 percent of the 50 units” released on its first day (July 6). However, as of July 29, only ten transactions could be found in URA’s published private residential property transaction database.
The $3 billion money laundering case
In 2023, Singapore’s infamous $3 billion money laundering case involves 152 properties, with eight of them being Sentosa Cove landed homes. Subsequently, OCBC sold 69 Ocean Drive for $22 million or $1,15 psf after two failed auction attempts. 258 Ocean Drive changed hands at $16 million or $1,844 psf.
“Money laundering is to wash as much dirty money as possible in a deal. Thus, money launderers are happy to pay well above valuation. The parties involved in the deal (the seller, the agent and the lawyer) benefit too. Likewise, the bank is most willing to match their valuation with whatever the selling price.
Genuine buyers and investors can no longer tell, behind those inflated prices, what the fair values are for Singapore’s properties, including commercial properties, GCBs, luxury homes and new launch projects.”
– “Just sold at record high!“, PropertySoul.com
Loss-making deals in Sentosa Cove
• Percentage and number of Sentosa resale homes making a loss:
– March 2020 to April 2023: 62.8%, average loss $1.56 million
– May 2023 to June 2026: 64.5%, average loss $1.28 million
– 2021 to 1H of 2026: 161 out of 244 non-landed, 24 out of 47 landed
• Prices for non-landed homes in Sentosa Cove between 2021 and 2025
– 2021: $1,300 to $1,700 psf
– 2023: $2,125 psf
– 2024: $1,792 psf
– 2025: $1,728 psf
Food for thought
From 2017, every now and then EdgeProp.sg would come up with an article headline about a Sentosa home sold at a loss of $x.xx million.
Currently, there are about 392 landed homes and 1,766 non-landed homes in Sentosa. When we couldn’t stop reading negative news in the media, helpless owners are losing hope for price recovery.
• Can the media report losses in other (CCR) districts instead, not just Sentosa?
• Any other creative ideas to boost the image of luxury homes in Sentosa?
• How can we rebuild the confidence of the cash-rich to buy there again?
(the above is a repost from my facebook page fb.com/propertysoulblog)
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