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Sentosa Cove is the closest thing Singapore has to gated homes for the fabulously rich, famous and, sometimes, infamous. Until recently, one of the bungalow owners was none other than Tony Chan Chun Chuen, the former feng shui consultant to the late tycoon Nina Wang who had tried to claim her multibillion dollar fortune. Chan’s former Sentosa Cove house has an auspicious address and sits on some 9,700 sq ft of seafront land. He reportedly paid S$16.5 million (RM39.8 million) for the site in 2008. A fortnight ago, workers were still putting the finishing touches to the 2½-storey home with eight bedrooms, a swimming pool and a huge attic. The house recently obtained its temporary occupation permit (TOP). The house is said to have been sold to a Singaporean buyer, with the deal completed at end-January.
The new owner is the boss of a Singapore-listed property company who intends to keep the property for his own use as a weekend home. The sale was done at an undisclosed price in a private treaty deal, and a caveat has yet to be lodged. The deal is believed to be brokered by Kris Ho, managing director of Newsman Connections, a specialist in the luxurious waterfront residential enclave.
The Singaporean who bought Chan’s former property also owns three other bungalows at Sentosa Cove, all with seafront views in the south cove and were purchased over the last two years.
Another low-profile local investor, famous among property agents, is also widely regarded as the biggest property punter on Sentosa Cove. Word on the cove is that he lives in a sprawling mansion on two bungalow plots along Ocean Drive with views of the sea, and owns at least half a dozen bungalows in Sentosa Cove.
In fact, for the last two years, the largest group of bungalow buyers at Sentosa Cove has been cash-rich Singaporeans, although mainland Chinese have been the source of some of the jaw-dropping transactions — the purchase of the house at Paradise Island for S$36 million (S$2,403 psf) in 2010 being a prime example. However, in terms of representation, Singaporeans made up 45.2% of bungalow buyers at the cove in 2010 and 37.5% last year, according to DTZ Research. The next biggest group, the mainland Chinese, accounted for 27.4% and 20.8% in 2010 and 2011 respectively.
Transactions down significantly
Bungalow transactions in Sentosa Cove had been hit by government property cooling measures both at the start and at the end of 2011. The Dec 8 imposition of the additional buyer’s stamp duty (ABSD) of 10% for foreigners, 3% for permanent residents buying their second or subsequent property and 3% for Singaporeans on their third or subsequent residential purchase has clearly dampened sentiment. Meanwhile, January saw a steep hike in seller’s stamp duty (SSD) of 16%, 12%, 8% and 4% levied on those who sell their residential property within the first four years of purchase.
Thus, only 24 bungalows in Sentosa Cove were sold in 2011 compared with 62 in the previous year, says DTZ Research, based on caveats downloaded from URA Realis on Jan 31. “There has always been a more speculative investor-driven element at Sentosa Cove, as it is the only enclave where foreigners are allowed to buy bungalows,” says Chua Chor Hoon, DTZ’s head of Asia-Pacific. All the residential properties including the bungalows there are sold with a 99-year lease.
On top of the new buyer’s stamp duty, a slower economic outlook is likely to further dampen sentiment of purchasers. “In view of the weaker economic outlook in 2012, and the introduction of the ABSD, foreign buyers are going to be more selective in their purchases, hence we expect transactions of Sentosa Cove bungalows to be slower in 2012,” says DTZ’s Chua. Prices at Sentosa Cove are therefore likely to correct first, she reckons, compared with the Good Class Bungalows segment, where homes are largely freehold and in the prime districts, and which foreigners are not allowed to buy.
“Even though the economy is expected to be slower in 2012, positive growth of 1% to 3% is still expected,” observes Chua. “Households and investors are also in a better position today compared with the previous global financial crisis of 2008/09. Unless the eurozone crisis worsens significantly and affects economic growth more than anticipated, it is unlikely that there will be distressed sales.”
Still, there hadn’t been a single bungalow transaction since the ABSD was announced. During the Lunar New Year period, Newsman’s Ho had been busy entertaining mainland Chinese clients who were in town during the festive holidays, and wanted to view some of the bungalows on the market at Sentosa Cove. There have been offers, but they tend to fall short of owners’ asking prices, says Ho.
For example, just days after the ABSD was introduced, Ho received an offer for a Cove Grove house that had been on the market at end-2011 with a price tag of S$29 million. The mainland Chinese buyer offered S$25 million, but the Singaporean owner turned it down. Since then, he has upped his asking price to S$31 million (S$3,163 psf). The house, on a sea-fronting plot, has a built-up area of over 11,000 sq ft and land area of 9,800 sq ft. It has eight bedrooms including a spacious master suite with uninterrupted sea views, a rooftop Jacuzzi and a swimming pool.
“I’m not pessimistic about the market at all,” says Ho. “This group of elite people are willing to hold on to their prices. They think Sentosa Cove is still very competitively priced, and there are only over 300 bungalows here, and just 47 have full sea views, while 67 units along Ocean Drive have sea views but are facing the port and city.” What’s more, foreigners still see Singapore as a safe haven, she adds. “They like the fact that there’s no estate duty or capital gains tax. They also consider Singapore a place for them to raise their family, given the good infrastructure and education system.”
Singaporean bargain hunters
According to Samuel Eyo, director of Savills Prestige Homes, most of the enquiries he’s been getting this year have been from Singaporeans. However, these prospective buyers are looking for distressed property. Eyo had recently shown a Singaporean buyer a house along Ocean Drive sitting on a 6,700 sq ft plot, with a built-up area of 8,000 sq ft. The five-bedroom house with a price tag of S$20 million has views of the sea and overlooks the port. “The buyer offered S$12 million, which of course the owner rejected,” relates Eyo.“These buyers are trying their luck by making lowball offers. Owners are prepared to negotiate, but are unwilling to offer more than a 5% discount at this point.”
Owners are reluctant to reduce prices, particularly of the sea-bungalows as they recognise that such properties are limited in number, adds Eyo.
Investors are generally looking for “fire sales” and asking for steep price discounts of S$5 million to S$7 million, acknowledges Newsman’s Ho. End users, on the other hand, tend to be more realistic in their offers, and are looking at discounts of S$1 million to S$3 million, she adds.
However, deals with steep price discounts are rare. Two years ago, a young Chinese woman drowned in a lap pool in one of the bungalows along Ocean Drive. When the property was put on the market, many agents speculated that the new buyer would be an unsuspecting foreigner.
Instead, within months, it was reportedly sold to two Singaporeans — Mark Poh Seng Kui and his older brother, David Poh Cheng Seng, who own Nam Leong, a company that supplies sanitary ware for buildings and steel for the construction, oil and gas and shipbuilding industries.
The Pohs were well aware of the bungalow’s history, but to them, it also presented an opportunity to get a bargain. They paid S$13.6 million (S$1,690 psf) for the 2½-storey house sitting on an 8,051 sq ft tract, according to a caveat lodged in July 2010. The house, which has a private berth and overlooks the waterway, has since undergone a dramatic refurbishment, and the pool reportedly drained. According to property agents, the Pohs have already moved in, and even threw a housewarming party recently. 
What’s for sale?
Along Ocean Drive, a Balinese-style bungalow with high ceilings, outdoor shower, water features and an infinity pool is up for sale. The home has four spacious bedrooms with en suite bathrooms, as well as a basement entertainment area and bar. There’s a spacious living and dining area with a layered view of the garden, the swimming pool and the sea beyond. The house has a land area of 10,110 sq ft and built-up area of 8,600 sq ft. The price tag on the house is S$34 million, which is a whopping S$3,363 psf. Savills Prestige Homes is marketing the property.
“Owners of sea-facing units are still asking for prices in the S$3,000 to S$3,500 psf range, while those which overlook the waterway or golf course are looking at prices in the S$2,200 to S$2,400 psf range,” notes Newsman’s Ho. “Nothing much has changed in terms of asking prices.”
Sea-facing units may command the highest premium, but those who own yachts prefer houses with private berths overlooking the waterways, says Paige Mou, senior sales manager of resale division at DTZ, who has been marketing homes in Sentosa Cove for over a year.
Mou is currently marketing a house on Cove Way, which comes with a private berth. The house owner, a European, is said to be an architect who designed the property. An avid golfer, he even created a putting green on the attic level which replicates the terrain of an actual golf course. The glass roof in the house has rain-sensors, and will automatically close when it rains. Other details include leather panelling on the kitchen wall, handcrafted timber flooring from the US, and bathrooms fitted with Hansa’s Canyon basin mixers, where the attractive feature is the LED lights that change colour according to the water temperature.
“Those who build a house for their own residence tend to put a lot more thought into the property, and the details,” says Mou.
The six-bedroom house at Cove Way has a built-up area of 10,500 sq ft, sits on a land area of about 8,500 sq ft, and overlooks Sandy Island across the water. The owner had moved in just over a year ago when the house was completed. However, as the family is relocating back to Europe, the house has been put on the market with an asking price of S$23 million (S$2,713 psf).
Along Cove Drive is another house designed specifically for the homeowner, an investment banker from Pakistan. The architect who designed the house is K2LD, the architectural firm that has designed many of the private homes of the Who’s Who in Singapore. Luxurious details around the house include the “beadcrete finish” of the swimming pool, which is said to create a sparkling finish. In the master bathroom, the mosaic tiles are inlaid with white gold.
The house at Cove Drive sits on a land area of 8,060 sq ft and has a built-up area of 9,500 sq ft with six bedrooms and a huge entertainment floor on the attic. The attic can also be partitioned off to create a junior master suite if more bedrooms are needed. The house, which overlooks the golf course, has an asking price of S$23 million (S$2,854 psf). Newsman’s Ho is marketing the property.
Signs of a slowdown appearing
To date, evidence is mixed on whether prices have fallen, says DTZ’s Chua. Based on caveats lodged as at end-January, the most recent bungalow transaction at Sentosa Cove captured on URA Realis is a house located along Cove Drive. It has a land area of 7,858 sq ft and was sold for S$14 million (S$1,782 psf). The price could be due to its location, facing the islet rather than the sea, points out Chua. Another unit along Cove Drive, sitting on a smaller land plot of 6,857 sq ft, was sold for S$17.9 million (S$2613 psf) last September.
In another transaction, a bungalow sitting on a 12,820 sq ft site along Cove Drive was sold for S$33 million (S$2,574 psf) in January 2011. However, it changed hands again in November last year for S$27.6 million (S$2,153 psf), which is 16.3% lower than the previous price.
Over at Treasure Island, the most recent transaction was for a bungalow (sitting on a land area of 8,633 sq ft and facing the waterway) that changed hands for S$18.3 million (S$2,120 psf), also in November. The last time the property changed hands was in April 2010 at S$13.68 million (S$1,585 psf). The owner recognised a gain of 33.8%.
“Some houses fetched higher prices, while others were sold at lower prices,” says DTZ’s Chua. “Prices could be close to, or already at the peak as there are signs of a slowdown appearing.”
Cecilia Chow is the editor of City & Country at The Edge Singaporel
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 897, Feb 13-19, 2012
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