Is it a Good Deal?: The seller for this Sentosa condo lost $1.75 million

By Elizabeth Choong

/ EdgeProp Singapore |

May 27, 2024 11:18 AM SGT

This year’s lone transaction for Seascape incurred a loss of $1.75 million. (Photo: Samuel Isaac Chua/EdgeProp Singapore)

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SINGAPORE (EDGEPROP) – A four-bedroom unit in Seascape was sold at a loss of approximately $1.75 million. The seller sold the 2,680-sq ft unit at $1,884 psf earlier this month, having purchased the third-floor unit for $2,537 psf in October 2013. According to caveats lodged with URA, this unprofitable transaction is the first sale transaction for Seascape this year.

At the time of writing, Seascape had 20 unprofitable transactions out of 21 resale transactions. Losses ranged from $1.3 million to $6.6 million. As such, the loss of $1.75 million from the aforementioned transaction is not the largest loss for the development.

The transaction that resulted in the largest loss of approximately $6.6 million took place in February 2017 at $1,524 psf. The transaction was for a five-bedroom unit on the seventh floor. The 4,069-sq ft unit was purchased by the seller in June 2010 for $3,146 psf.

The lone profitable transaction was for a four-bedroom unit on the seventh floor. The 2,852-sq ft unit was sold in July last year for $2,235 psf, resulting in a profit of approximately $374,500. The seller had purchased the unit in January 2021 for $2,103 psf.

We used our analytics tool, 'Is it a Good Deal?', to determine whether the unprofitable sale transaction that resulted in a loss of $1.75 million constituted a good bargain for the buyer.

Located in an exclusive residential enclave

Seascape is a 99-year leasehold condo located along Cove Way in Sentosa. The 151-unit development is also located in District 4 and the Southern Islands Planning Area. Seascape obtained its temporary occupation permit (TOP) in 2011. All units in the development have at least three bedrooms and measure at least 2,000 sq ft.

Quayside Isle, W Singapore Sentosa Cove Hotel, One 15 Marina Club, and Sentosa Cove Village are located within a 1 km radius of Seascape. There are a number of restaurants and a preparatory school in Quayside Isle, as well as a Cold Storage supermarket in Sentosa Cove Village.

Source: EdgeProp LandLens (as at 24 May 2024)

The buyer may have secured a bargain

According to our 'Is it a Good Deal?' analytics tool, it appears that the buyer has managed to secure a good deal. The transacted price is below the average price for the project and is lower than the average price for a neighbouring development. Furthermore, it has a fairly long remaining tenure of 82 years. The main drawbacks are the lack of nearby amenities such as primary schools and MRT stations.

Source: EdgeProp Is it a Good Deal (as at 24 May 2024)

Unusual unit layout could have contributed to the loss

The unusual unit layout could have contributed to the $1.75 million loss suffered by the owner. The long and narrow layout means that the unit has long corridors connecting the different areas. These corridors can be used only as circulation space and may be deemed by some buyers as an inefficient use of space.

The unit also has three balconies. The balcony near the living area faces the sea, so residents might use it to enjoy unblocked ocean views. However, the balcony shared by Bedrooms 2 and 3 faces a garden in Seascape and may be considered wasted space by buyers who prefer indoor space over outdoor space.

The kitchen and dining area are sandwiched between the master bedroom and the private lift lobby. Some buyers may not like the close proximity of the master bedroom to the private lift lobby because of the lack of privacy. They may also prefer the master bedroom to be located further from the kitchen to prevent food odours from entering the master bedroom. Additionally, there is a small balcony in the master bedroom. Some buyers may like this balcony because it faces the sea and can serve as their private haven. However, some buyers may prefer more space for the master bedroom.

Weak price growth for Seascape

Cape Royale and Turquoise are the only condos within a 500m radius of Seascape. Both condos are 99-year leasehold developments in Sentosa. The 91-unit Turquoise obtained its TOP in 2010, while the 302-unit Cape Royale obtained its TOP in 2013. Both condos are also in the same district and planning area as Seascape.

Source: EdgeProp Is it a Good Deal (as at 124 May 2024)

Based on transactions for this year, the average resale price for Seascape ($1,884 psf) is above that for Turquoise ($1,552 psf) but below that for Cape Royale ($2,228 psf). It is notable that units in Cape Royale were held for rent until the developer released a few units for sale in 2022. At the time of writing, 97 transactions have been recorded for Cape Royale.

Despite having the lowest average price, Turquoise has the strongest price growth. From 2022 to this year, the average resale price for Turquoise grew by 2.2%, while the average price for Cape Royale increased by 1.5%. In contrast, the average price for Seascape fell by 7.9% over the same timeframe.

Source: EdgeProp Market Trends (24 May 2024)

Average resale price for Seascape lower than Southern Islands Planning Area

This year, the average resale price for Seascape ($1,884 psf) dipped below that for the Southern Islands Planning Area ($1,901 psf). Prior to this year, the average price for Seascape had always trended above that for the planning area. However, it should be noted that only one resale transaction has taken place for Seascape this year, while 67 transactions have been recorded for the planning area.

The average resale prices for Seascape and the Southern Islands Planning Area have consistently trended above that for District 4 ($1,820 psf). However, the average price for District 4 has displayed the strongest growth, increasing by 26.2% from 2017 to this year. In comparison, the average prices for Seascape and the Southern Islands Planning Area increased by 3.6% and 23.7%, respectively.

Source: EdgeProp Market Trends (as at 24 May 2024)

Interest for condos in Sentosa was given a boost in April when the developer offered 58 units in The Residences at W Singapore Sentosa Cove for sale. Due to the overwhelming response, additional units were offered for sale. A total of 65 units were snapped up at an average selling price of $1,780 psf.

Despite the strong price growths for leasehold condos in the Southern Islands Planning Area (23.7%) and District 4 (26.2%), they still lag behind the growth for their counterparts islandwide. From 2017 to this year, the average resale price for leasehold condos islandwide surged by 43.1% to $1,640 psf.

Source: EdgeProp Market Trends (as at 24 May 2024)

Conclusion

On the surface, it would seem that the buyer has secured a good deal for a spacious unit with a desirable address. Furthermore, the unit has four bedrooms and unblocked sea views.

However, the buyer might want to note the weak price growth for Seascape. Furthermore, average resale prices for leasehold condos in the Southern Islands and District 4 are not growing as strongly as their counterparts islandwide. Based on transactions for this year, the average price for nearby Cape Royale is lower than Seascape. Furthermore, Cape Royale is younger than Seascape by two years.

Condos in Sentosa might see more demand because of the positive response to the placement for sale of several units in The Residences at W Singapore Sentosa Cove. The average price of $1,780 psf for The Residences at W Singapore Sentosa Cove is lower than Seascape ($1,884 psf).

Additionally, some families may not want to live in Seascape because of the limited amenities in Sentosa. VivoCity, Seah Im Food Centre, and Harbourfront MRT Station are a short drive away but residents will have to leave Sentosa to access these amenities.

To learn more about this transaction, and whether it is a good deal, click here.