Seller incurs US$2.3 million, 50 per cent loss on unit at Seascape as Singapore’s Sentosa Cove continues to struggle
- A doubling of stamp duties to 20 per cent for foreign buyers has put international investors off, while locals are drawn to mainland Singapore where property is freehold
The loss-making deals continue at Sentosa Cove, a billionaire’s playground in Singapore that has become a lesson about the pitfalls of property speculation.
The seller of a 2,336 square foot, three-bedroom home at Seascape incurred a S$3.17 million (US$2.32 million) loss on May 23, the most unprofitable transaction in Singapore during the week of May 21 to 28.
The ground-floor unit was one of the first to be purchased when the seafront condo in Sentosa’s residential enclave was first launched for sale in March 2010. At the time, the owner paid S$6.27 million, or S$2,682 per square foot, for the property. The unit was sold for S$3.1 million (S$1,327 per sq ft) nine years later. The sale translates to an annualised loss of 7 per cent for the seller.
Hong Kong investors take advantage of a correction in Singapore’s property prices
Seascape has seen a streak of loss-making sales ranging from S$1.47 million to S$6.6 million over the last eight years, with no profitable deals at all on record. Its most unprofitable transaction at Seascape was the sale of a 4,069 sq ft, four-bedroom unit which changed hands for S$6.2 million (S$1,524 per sq ft) in February 2017. The seller had initially purchased it for S$12.8 million (S$3,146 per sq ft) in June 2010.
Despite its golf course, high-end restaurants and marina, average prices in Sentosa Cove are down at least a third from their 2011 highs, as ultra wealthy buyers have taken their money elsewhere.
A doubling of stamp duties to 20 per cent for foreign buyers – compared with just 3 per cent for Singaporeans – has put international investors off, while locals are drawn to mainland Singapore where property is freehold. Land on Sentosa island is leasehold.
Meanwhile, the most profitable transaction during the same week was the sale of a unit at the 999-year leasehold Allsworth Park, located on Holland Road near Pandan Valley. A 1,959 sq ft, four-bedroom unit there was sold for S$3.45 million (S$1,761 per sq ft) on May 27, roughly three times its price in September 2001 (S$1.18 million). The seller made an annualised profit of 6 per cent in what was also the most profitable transaction to date at the condo.
The second most profitable sale so far at the 170-unit, 34-year-old development was that of a similar-sized, four-bedroom unit. It changed hands for S$3.3 million (S$1.684 per sq ft) on March 28. The unit was first purchased for S$1.26 million (S$643 per sq ft) in April 2001.
Meanwhile, the second most profitable deal during the week was at Pebble Bay condo on Tanjong Rhu Road. The seller of a 2,336 sq ft, three-bedder sold the property for S$3.3 million ($1,413 psf) on May 23, having bought it for S$1.7 million 23 years ago.
