Sentosa stirs back to life

Property agents receiving more enquiries about units at the Cove

BUYING and selling activity is returning to Sentosa’s home market, the district billed as a premier waterfront living dream, after suffering lacklustre demand during the shock of the global financial meltdown late last year.

The hard-hit months of October and November saw zero caveats lodged, according to data on the Urban Redevelopment Authority website. In December last year and January this year, each month had one lonely transaction.

But when stock markets began sizzling on improved sentiment, Sentosa too started seeing a pick-up: February saw four caveats lodged, followed by a peak in April with 11 cases and then five caveats in May.

“Generally, property buyers are feeling good and sentiments have turned positive about the economy, that could be a reason why you see transaction volumes have picked up, in the high-end property market and in other markets as well,” said Mr Colin Tan, head of research and consultancy at Chesteron Suntec International.

In total, 24 caveats were lodged between January and May – more than double the 10 caveats during the five-month period of August to December last year.

But at the same time, prices for those luxury homes have come down considerably. The average transaction price in April was about $1,310 per square foot (psf), whereas it was about $2,400 psf on average in August 2007.

People who missed out on the boom – which peaked in 2007 – the last time are now playing catch-up since prices have returned to more reasonable levels, said Dr Chua Yang Liang, Jones Lang LaSalle’s South-east Asia’s head of research.

Property agents told Today they were getting more enquiries.

“For the past two months, I see about 10 per cent increase in investors asking about units located in Sentosa. They consist of both locals and foreigners,” Mr Joseph Ong, a property agent handling units at Sentosa Cove, said.

“Usually these buyers are more interested in renting out the properties or treating them as holiday homes,” he said. “They usually come in asking what is the average rental for the properties around Sentosa Cove.”

However, warned Mr Tan, the current property rally seems more sentiment-driven than one based on fundamentals.

“The fundamentals are not there, if investors are buying in hope that they could rent them out, they have to take into the account that the rental market is still not in recovery mode.”

Mr Tan added that current buyers could be mainly investors and trading firms rather than home-occupiers.

Dr Chua, professing to be still bearish about the property market, warned investors to be careful when entering the market.

“Any negative sentiment right now will percolate through and cause a dent in the overall buying sentiments in the market,” he said.

Source : Today – 10 Jun 2009