Monday, March 28, 2011

From hot spot to chilly cove

ONLY eight non-landed homes have been sold in the once property hot spot of Sentosa Cove in the first two months of the year.


This is down from 17 transactions in the last three months of last year and well under the second quarter of last year when the 71 sales were recorded. Then, the launch of City Developments' The Residences at W Singapore accounted for 19 of the total sales.


Property watchers keep an eye on the Sentosa Cove transactions as the area is regarded as an exclusive segment of the local property market, where buyers opt for the unique lifestyle.


Agents reckon that prices of the condos there - all leasehold - some of which have sold for more than $2,000 psf have not moved much, with investors turning their attention to other parts of Singapore.


That may be one reason why sales seem to have dried up. In comparison, new home sales for January and February came to more than 1,000 units each month.


Other factors could be the lack of new launches and a large number of unsold units remaining. One property agent said: 'It is a buyers' market.'


The eight sales recorded until March 8 this year totalled $44 million and included new homes and subsale and resale transactions. Some sales occurred in the Seascape and Marina Collection estates, according to caveats lodged with the Urban Redevelopment Authority (URA).


However, while the appeal of condos seems to be fading with fewer people asking for viewings, landed homes sales on Sentosa Cove appear to be holding up.


Experts said that a segmented market might be emerging on Sentosa. The reasons for the sales slump likely include the lack of new launches and marketing activity and the big supply of condos - some already completed - that remains unsold.


Mr Tan Kok Keong, OrangeTee's head of research and consultancy, said: 'Enquiries have slowed a little but that's also a function of a lack of marketing activities since there haven't been many ads recently... Once a new launch takes place, it creates a buzz and will bring about transactions in neighbouring projects as well,' he added.


Developers have had a bumper year with healthy cash flow and so have strong holding power, and seem to be biding their time.


There is certainly not a shortage of stock.


As at Feb 28, at least 481 homes from five projects have yet to find buyers.


Ho Bee's Turquoise has 48 completed flats sitting unsold but 41 units have not been launched and are officially not on sale.


CDL executive chairman Kwek Leng Beng told the firm's results briefing last month that it does not plan to launch any more units at The Residences at W Singapore in Sentosa Cove.


It has sold only 21 of the 56 units released in the 228-unit project.


Mr Kwek said of the project: 'I can sell it very cheap because my land cost is cheap but I am not prepared to sell it. I have holding power, I will keep it and make it an investment, and later when there is good demand I will release and move on.'


Experts said condo home prices will likely hold steady as there is almost no land left for sale and developers are confident that once construction around Sentosa Cove is complete, buyers will stream back.


Bungalows seem to be bucking the trend of slower sales, with agents continuing to get good responses from their listings.


Newsman Realty managing director K. H. Tan said that after a slightly slower fourth quarter, interest is picking up again with his firm holding up to 20 viewings a week. Genuine offers have also been tabled, he added.


Caveats show that only two bungalows have been sold this year to March 8.


But Mr Tan said his firm has closed four other landed transactions whose caveats have yet to be lodged. A few others are in negotiation.


Sentosa Cove is the only place where foreigners without permanent resident status can buy landed homes.


The chief executive of Global Property Strategic Alliance, Mr Jeffrey Hong, said bungalows can also be customised for buyers.


But condos involve shared facilities and compete with prime apartments on the mainland, so that may deter the well-heeled.


'Developers are probably also waiting to see how the January measures affect the market... Condo prices will probably hold stable or if it moves up, it'll be by less than 3 per cent,' added Mr Hong.

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