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Covid-19 provides boost to Sentosa private residential market

SINGAPORE — Covid-19 may have provided a boost to luxury properties on Sentosa island after a relatively subdued market prior to the pandemic.

Covid-19 provides boost to Sentosa private residential market

Luxury properties on Sentosa island received a boost during the pandemic, with both sales and rental volumes rising in 2020 and the first half of 2021, although it is still far from its heyday around 2010.

  • The number of resale transactions for landed and non-landed properties on Sentosa have increased between 2019 and 2021
  • Prices have been rising in the first half of 2021 as well
  • Rental agreements have gone up between 2019 and 2020 and remained stable in 2021
  • Singapore’s pandemic response has inspired confidence among wealthy buyers, analysts said 
 

SINGAPORE — Covid-19 may have provided a boost to luxury properties on Sentosa Island after a relatively subdued market before the pandemic.

Data from several property consultancies showed that the number of sales transactions for landed and non-landed properties on the island have jumped from 2019 to 2020, with transactions doubling for landed properties. Prices have been on an uptick as well. 

This uptrend has continued in the first half of 2021. 

Despite more foreigners leaving Singapore than entering since the pandemic started due to border restrictions, rental contracts have remained stable. They had increased in 2020, compared to 2019. 

Analysts said that the rising demand for Sentosa properties is in tandem with the recovery of the broader residential market on mainland Singapore, especially among luxury residences. 

However, while all the indicators point to an improvement, the market is still far from its heyday around 2010. 

At the time, median prices for non-landed properties at Sentosa Cove were at S$2,200 per square foot (psf). 

In the first half of 2021, these prices hovered at around S$1,530 psf, data from several property consultancies showed.

This is a 5.8 per cent increase from S$1,446 psf in 2020, which followed a 1.2 per cent increase from S$1,429 psf in 2019. 

In the meantime, prices for Sentosa’s landed properties increased by more than 8 per cent from S$1,518 psf in 2020 to around S$1,650 in the first half of 2021. 

As for resale transactions, there have been at least 60 condominium units and 12 landed properties on Sentosa sold just in the first half of this year, a jump from the 43 condominium units and 13 landed properties that changed hands there in the whole of last year. 

Compared with just 23 condominium units and seven landed properties sold in 2019, 2020 saw a 87 per cent surge in condominium sales and almost a doubling for landed properties. 

While rentals for landed properties did not show any significant difference between 2019 and 2020, the number of rental contracts signed for condominium units in Sentosa Cove increased by 8.6 per cent in 2020 to 873, up from 804 the year before. 

For the first half of this year, 394 non-landed and 32 landed rental contracts have been signed. 

Analysts said that the delay in completion of new residential projects and the need for more space due to work-from-home arrangements could have led some people to take up rental housing at Sentosa Cove. 

SAFE HAVEN FOR WELL-HEELED BUYERS

Mr Wong Xian Yang, head of research in Singapore at real estate services firm Cushman and Wakefield, said that the factors driving up sales in Sentosa are broadly similar to prevailing trends in the overall residential market in Singapore. 

This includes buyers’ long-term confidence in the country's residential market and low interest rates. 

“Singapore has differentiated itself with high vaccination rates and a strong track record in containing the pandemic. This has inspired confidence among well-heeled foreign buyers looking for a safe haven amid the pandemic,” he said. 

Ms Christine Sun, senior vice-president of research and analytics at property firm OrangeTee and Tie, said that the recovery of Singapore’s wider economy and strong job creation in the first half of the year also attracted buyers.

Reports of fund flows into the country could have also boosted the property market. 

Mr Mark Yip, chief executive officer of real estate agency Huttons Asia, said that the number of single-family offices is estimated to have doubled from 200 in 2019 to about 400 at the end of last year. 

Family offices are private wealth management advisory firms that serve ultra-high-net-worth investors (UHNWI). 

“Some of these UHNWI were already residing in Singapore before the pandemic struck and have decided to buy a property as Singapore emerges as one of the best places to be during this pandemic,” Mr Yip said. 

Mr Wong of Cushman and Wakefield said that this has also driven up demand for luxury properties in general, some of which has spilled over to Sentosa Cove.

Sentosa Cove is also the only place in Singapore where non-residents are able to buy a landed home after getting the necessary approvals. 

Mr Nicholas Mak, head of research and consultancy at property firm ERA, said that China’s regulatory crackdown on its internet tycoons could be another factor.

“Because there is a policy risk there (in China), if they take their money to the United States, they may be scrutinised. So they look for another financial hub,” he said. 

Related topics

Sentosa property Covid-19 housing Luxury

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