Price gap between GCBs and Sentosa Cove bungalows narrows further

Senja Close EC Bukit Panjang offers buyers a range of payment plans to make their purchase easier. The payment plans range from a standard 5-year mortgage plan to a 9-year progressive payment plan. This makes it easier for buyers who need time to save up and make regular payments.

The additional Buyer’s Stamp Duty (ABSD) in Singapore for foreign buyers purchasing residential property has increased drastically from 30% to 60%. This has had a heavy impact on the sales of luxury private homes in exclusive enclaves such as Sentosa Cove, taking effect from 27 April.

List Sotheby’s International Realty’s Director of Research, Han Huan Mei, noted the decline in transactions from March to April in the area. 13 apartments and 2 detached homes had been caveated in February, with this figure dropping down to 8 in April and further to 4 in May.

The ABSD hike appears to be the cause for this sharp drop off. Although Sentosa Cove is the only location in the country that foreign buyers can purchase landed homes, this measure has had a knee-jerk reaction on the market.

“We expect the buying mood for bungalows at Sentosa Cove to remain muted for the rest of 2023,” says Han.

However, there have been some foreign buyers that have sensed opportunity in recent weeks. 3 foreigners purchased 3 apartments in June, with 4 Singapore Permanent Residents following suit in July.

According to research by List Sotheby’s International Realty, the price gap between Sentosa Cove bungalows and Good Class Bungalows (GCBs) has decreased over the last few years. Once around $11.65 million in 2021, this figure has dropped to $5.37 million in 2023.

“Considering that bungalows at Sentosa Cove are all 99-year leasehold properties, whereas nearly all GCBs are freehold, the former are generally priced lower than GCBs. But there is a premium attached to the types of sea views which only the bungalows at Sentosa Cove get to enjoy,” explains Han.

Recently made Permanent Residents and Citizens that are eager to acquire a property may drive the market to pick up again in 2024. Han believes that prices will remain similar to this year with the exception of bungalows with land areas that exceed 18,000 square feet; due to the high demand for these spacious homes, they are expected to fetch higher prices.