Waterfront bungalow at Cove Drive on the market for $21.5 mil
In the southern cove of Sentosa Cove, a bungalow fronting a waterway is on the market for $21.5 million ($2,710 psf). The 2½-storey detached house at 77 Cove Drive has a built-up area of 6,500 sq ft and sits on a 99-year leasehold site of 7,933 sq ft.
The house has a spacious living room on the first level, with fullheight glass doors leading out to an outdoor deck and a swimming pool with views of the waterway and Pearl Island on the opposite side. Besides the living room, there is a dining room, a guest room, a kitchen and a helper’s room on the first level. The car porch is big enough to accommodate three cars.
The second floor contains a family room and four en suite bedrooms, including the master suite. Hence, the house has five en suite bedrooms. On the top floor is a study and powder room. According to a property title search, the owners purchased the site at Cove Drive from Sentosa Development Corporation in 2007.
The owners had collaborated with their architect, the late Eddie Wee — the principal architect of his eponymous architectural practice — on the design of the house. Full-height glass windows and doors provide views of the waterway and bring daylight into the interiors. An architectural feature of the house is the sizeable oval-shaped window at the staircase.
The property may have been built 13 years ago, but it is still in good condition, says Steve Tay, co-founder and executive director of the eponymous Steve Tay Real Estate (STRE), who is handling the sale.
Before co-founding STRE in early July, Tay was with List Sotheby’s International Realty. He has been a realtor for 22 years, with the past decade spent focusing on luxury homes in Sentosa Cove and Good Class Bungalows (GCBs) on the mainland.
Tay adds that the owners are selling the property at 77 Cove Drive as their children are studying in the UK and have relocated there. Out of 350 bungalows in Sentosa Cove, only those fronting the waterways have private berths for a yacht. They number fewer than half, and the house at 77 Cove Drive is one of them, he notes.
Rental demand
Since listing the property for sale last month, he has fielded more enquiries about leasing the property, with monthly rental offers of $50,000. He attributes the increase in rental demand for luxury property to wealthy foreigners applying for Singapore permanent residence (PR) or citizenship. As the process typically takes one to two years, they are looking to rent a home in the interim, he surmises.
Foreigners switched gears and decided to rent instead of purchasing
a residential property after the latest round of property cooling measures kicked in on April 27. Additional buyer’s stamp duty (ABSD) for foreigners buying residential property doubled to 60% from 30% before.
Tay is optimistic that rental demand for luxury homes will remain strong over the next few years.
“The reason for my optimism is the increase in the number of family office applications, with many still pending approval,” he says. The Monetary Authority of Singapore said there were 1,100 single-family offices (SFOs) in Singapore as at end-2022, up from 672 in 2021 to about 400 in 2020. At least 200 SFO applications are waiting for approval.
“Even if only 10% to 20% of the existing SFOs decide to apply for PR either through the global investor programme or the normal scheme, that’s about 120 to 240 new PRs,” adds Tay.
Foreign demand
Sentosa Cove properties saw healthy demand in the first half of 2023, with buyers from Indonesia, India, China, and the Middle East, including Singapore PRs. Even after the cooling measures were announced, Tay observed increased enquiries from Singaporeans and PRs. “Foreigners have been driving up prices in Sentosa Cove over the last few years, and they feel it is a good window to buy into a home at fairer values,” adds Tay.
Based on caveats lodged, seven bungalows have changed hands in Sentosa Cove this year. But there were at least three other deals that had no caveats lodged. Tay reckons there could be more. He also estimates that at least 15 bungalow deals went unrecorded in Realis in 2021 and 2022. Most were off-market deals, with buyers and sellers requesting anonymity and the agents having to sign non-disclosure agreements.
The most expensive bungalow deal in Sentosa Cove this year — in absolute and psf terms — was the bungalow at Coral Island, sitting on 13,435 sq ft, sold for $36.5 million ($2,717 psf). This year, four bungalows changed hands for prices above $2,500 psf, which pushed up the overall average price to $2,329 psf.
Last year, there were 19 bungalow deals, of which nine were done at prices above $2,000 psf. The overall average price was $1,918 psf. In 2021, there were 26 bungalow deals in Sentosa Cove, with an average price of $1,778 psf. The number of transactions in 2022 moderated after the last set of property cooling measures in December 2021, which saw ABSD for foreigners increase to 30% from 20% before.
A pause in transactions?
Besides the doubling in ABSD for foreign buyers in April, there was also a pause in activity in the luxury residential market following the arrests of the money laundering syndicate from Fujian, China, in the middle of August.
Second Minister for National Development Indranee Rajah told Parliament on Oct 3 that the authorities have seized 152 properties and 62 vehicles worth more than $1.24 billion. Prohibition of disposal orders have been issued against these properties. Of 94 residential properties issued with the prohibition of disposal orders as of early October, eight were landed houses in Sentosa Cove.
After the arrests were made in August, Tay said he received at least 10 calls from his Singapore high-networth clients who wanted to know more about the outcome of the seized properties. “They wanted to be informed if the properties in Sentosa Cove were to be put up for auction, as they wish to relocate to Sentosa Cove or buy one of the properties for use as a weekend home,” he adds.
Tay says: “The demand for a unique waterfront lifestyle in Sentosa Cove is still strong”, adding that the current slowdown allows locals and PRs to enter the market. It is also an opportunity for buyers from five countries — Iceland, Liechtenstein, Norway, Switzerland and the US — to purchase these properties. These buyers would enjoy the same tax treatment as Singapore citizens under Free Trade Agreements and are exempt from the 60% ABSD.
There has been a pick up in the number of transactions by mainland Chinese with US citizenship in Singapore. In 2Q2023 and again in 3Q2023, US citizens accounted for the largest number of foreign residential property purchasers, followed by Chinese citizens in second place, says Lee Sze Teck, senior director of research at Huttons Data Analytics. Singaporeans and PRs made up a significant portion of residential property buyers in 3Q2023. Foreign buyers made up only 1.7% of residential property transactions in 3Q2023, as most were waiting for their PR or citizenship approval before buying a property in Singapore, notes Huttons’ Lee.
STRE’s Tay remains confident about Sentosa Cove. In September, he brokered the sale of a neighbouring bungalow at Cove Drive for $20.5 million or $2,543 psf. The buyer is a Singaporean.