99 Years Sentosa Bungalows See Buzzing Demand
Why & Who are the Buyers?
Recently, The Business Times reported that Sentosa bungalows see buzzing demand. There were 14 villas sold as of August 2021; compared to only 13 deals done in the year 2020.
So what’s happening to Sentosa Cove? Why are there still strong demand, despite the leasehold 99 years status?
Sentosa Bungalows – Quick Facts
Sentosa Cove opened with a bang but prices have slumped since 2011, with the introduction of cooling measures. As you can see from the slide, ABSD (Additional Seller Stamp Duty) for foreigners have increased from 10% in 2011 to 20% in 2018.
After the ABSD increased in 2018, there were only four transactions in 2019.
The average price achieved in 2011 was close to $3,000 per square foot.
In 2020, the average price was about $1,700 per square foot. Some units even transacted at about $1,100- $1,200 per square foot. This was in year 2020. So why is Sentosa Cove still attractive despite the leasehold 99 years status?
📌 Sentosa Bungalows Selling #1:
Sentosa Cove is a very quiet town with a resort Iifestyle.
Last week, I brought a buyer to Sentosa Cove to view a few units listed for sale. You can sense the difference in the quality of living over there. It is like a different town from mainland Singapore and will attract families with grown-up children who do not need to be near schools. Honestly it may be quite challenging if you need to send your young kids to their primary school everyday
📌 Sentosa Bungalows Selling #2 :
Only address where foreigners can obtain approval to purchase a bungalow for their own occupation
These are some statistic numbers. Based on URA caveats, more than 50% of buyers in Sentosa Cove are foreigners or PR. Among the foreign buyers, many are from China. This is a quote from Today’s article on the 10th of August. Singapore pandemic response has inspired confidence among wealthy buyers from abroad, especially now with the crackdown on the internet tycoons in China. It seems to attract more China buyers to come to Singapore.
📌 Sentosa Bungalows Selling #3:
Lower entry prices now
Sentosa Cove prices saw their peak in 2013. Prices then were close to $3,000 per square foot. The average price now is about $1,900 per square foot. This drop in price is more than enough to cover the 20% ABSD, payable by foreigners.
📌 Sentosa Bungalows Selling #4:
The leasehold 99 tenure
This 99 years tenure may be an issue with Singaporeans but might be a non-issue to China buyers because land tenure in China is mainly 70 years and Sentosa bungalows have about 70 to 80 years remaining. The fact is not everyone needs a freehold property as it will also be more expensive.
Don’t forget the fact that when these foreigners come to Singapore, they are not eyeing only for the land or the bungalows. They are looking for PR status for themselves or their family. It is really beyond buying a house. It is buying status or security for the family.
On the 24th of August, there are bank auctions for one of the Sentosa Cove bungalows, asking for $10.8 million and the per square foot is about $1,500 per square foot. This is a good indication of the recent price trend.
Those interested can give me a call to arrange for the viewing. This sums up my four points. If you have any views or opinions, feel free to leave them in the comments.
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