Sentosa Cove – The Emergence of Relative Value

In the past 2 quarters, the market has been fixated on the record prices and the strong take up rates for new launches in the mid-tier and mass market segments of the non-landed private residential market, it appears that market attention on Sentosa Cove had been lost.

After Q3/2022, the attention span of the market for this island began trending down with transaction numbers for non-landed residential properties falling from 44 units in Q2/2022 to 11 units in Q1/2024. The data, downloaded from Realis on 4th April 2024, reflects this decline. After a brief turnaround from Q2/2019 to Q4/2022, prices had been declining since then. Graph 1 illustrates the average transacted prices on a S$psf basis and the total number of transactions per quarter.

Graph 1: Average Prices and Transaction Volume – Sentosa Cove Non-landed 

Source: Savills Research & Consultancy, URA Realis

However, what was not noticed is that the sharp price increases in the mid-tier and mass market segment of the non-landed market had effectively closed the S$psf gap between them and Sentosa Cove. In Q1/2024, the average price at Sentosa Cove was S$1,896 psf while in the RCR (Rest of Central Region) and OCR (Outside Central Region), the prices were S$1,957 psf and S$1,764 psf respectively. Graph 2 illustrates this clearly.

Graph 2 – Mid-tier and Mass Market pricing converging towards Sentosa Cove 

Source: Savills Research & Consultancy, URA Realis

From Graph 2, Sentosa Cove prices have generally been below RCR (mid-tier) prices since 2018. Thereafter it started to claw back in relative pricing terms. Recent record setting prices for new launches in the OCR (mass market) closed the pricing gap between the mass market segment and Sentosa Cove.

It appears that OCR prices may be setting a support level for those at Sentosa Cove. With both OCR and RCR prices still trending up and Sentosa Cove prices significantly below those in the CCR (luxury segment), an even stronger case to support Sentosa Cove as a place where one can find value buys emerges.