IT HAD been marketed as "the world's most desirable address" and pitched as a playground for the rich and famous, but since the last peak in transaction activity in 2010, property prices in the waterfront housing district of Sentosa Cove have lagged those for high-end residences on mainland Singapore. Market watchers attribute this to several factors, including the introduction of the additional buyer's stamp duty (ABSD) in late 2011 at a rate of 10 per cent on foreign buyers of Singapore residential properties. In January 2013, the rate was hiked to 15 per cent before being raised further to 20 per cent last July. Because of the way Sentosa Cove had been marketed, it had historically relied more heavily on foreign buyers compared with high-end homes on the mainland. Hence many players with stakes in Sentosa Cove see ABSD as the "killer" for residential sales in the precinct. Says a spokesman for Hong Leong Group: "ABSD is a significant deterrence on foreign buyers/investors. This heavy tax increase can cause potential buyers to have some second thoughts."
The group is the parent of mainboard-listed City Developments, which was involved with developing The Oceanfront @ Sentosa Cove condo project and The Quayside Collection hotel, retail and residential mixed-use project.
Adapted from Business Times 6 July 2019