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Sentosa

Sentosa Cove Bungalow fetches Record $39 M

Business Times – 01 Mar 12

Summary:

  • A sea fronting bungalow at Cove Drive has changed hands at $39 million, a record absolute price for a bungalow in upscale waterfront residential district of Sentosa Cove – $2,448psf on land area of 15,929sqft.
  • Surpasses the previous high of $36 million for a bungalow on Paradise Island that was transacted in 2010. That worked out to $2,403psf on land area of 14,983sqft for the waterway-facing property.
  • The property is understood to have been sold by a Singaporean to a buyer from India who is said to be involved in the resources sector. The completed bungalow includes 5 bedrooms, a spacious living area, and an entertainment room.
  • Residential properties on Sentosa Cove have 99 yr leasehold tenure.
  • On mainland Singapore, talk in the market is that another headline-grabbing price may be set in Good Class Bungalow Area (GCBA) involving a vacant plot of at Jervois Hill. The agreed price is said to be $31 million or $2,050psf based on the freehold site’s land area of around 15,120sqft.
  • A Singaporean investor is thought to have entered a deal to sell the land to a party who is said to have paid a higher-than-normal option depoisit. The deal also involves a completion period of 1 year – longer than the usual 3 months. Word on the street is that the buyer will be applying to become a Singapore citizen.
  • Purchases of landed homes on mainland Singapore by foreigners (including PRs) is restricted. Such buyers have to obtain permission from the Land Dealings Approval Unit (LDAU). Applicants have to fulfil certain criteria before permission is granted, including being a Singapore PR and making significant economic contribution to the country.
  • Sentosa Cove is the only place in Singapore where non-PR foreigners may buy a landed home, thought still subject to LDAU approval. A foreigner (including a PR) may own only 1 landed home in Singapore (including Sentosa Cove) and this must be used for own occupation. The land area for the property must not exceed 15,000sqft.
  • After an inital knee-jerk reaction to the introduction of the additional buyer’s stamp duty (ABSD) that took effect on 8 Dec, house hunters have started to return to the bungalow market since the Chinese New Year period. (Generally, it has always been like that, with or without the new measures, the period just before Chinese New Year has always been quiet.)
  • “Foreign interest returning, with potential buyers from places like China, Indonesia and India. They come from a range of backgrounds, including industrialists, and even developers from China. Some have children studying in Singapore while others find Singapore an interesting global city. They believe there is room for substantial price appreciation in Singapore bunglalow prices.” (Yes, I have informed many of my investors who are thinking of holding back, that foreigners have been quietly buying properties since Chinese New Year.)
  • “Although transaction volumes have slipped for GCB, transacted prices are generally holding well.”
  • “Some sellers are revisiting their prices now – not because prices are set to fall, but rather they have realized they had overpriced right from the start. In the prime GCB locations such as Nassim, Dalvey or Tanglin, sellers would rather withdraw their properties from the market than lower their prices.” (Owners of these units do not need to sell their property, unless they have an irresistible offer.)
  • “However, in the less prime GCB estates where demand is not as strong, some sellers have adjusted their asking prices and usually these are the motivated ones. Those who do not need to sell their GCBs acknowledge that this is not exactly the best time to do it.”
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