In early March, we shared on our social media a sub-sale transaction at Fourth Avenue Residences. It was a notable transaction due to its S$322k capital gain. The gain is also currently the highest in the project.
Perhaps more importantly for the seller, they don’t need to pay the Seller’s Stamp Duty (SSD) as the holding period is over three years.
What’s a sub-sale?
A sub-sale occurs when a property bought directly from the developer is resold before the project is completed.
There are many reasons why people may resell their units before the project is completed, with one common reason being to make a profit. But such speculative purchases have led to high property prices, prompting the authorities to introduce the SSD around a decade ago.
Owners who have sold their properties within three years will need to pay the SSD. Here’s the rate:
| Period of ownership | SSD rate based on purchase price/ market value (whichever is higher) |
| Up to 1 year | 12% |
| Over 1 year, up to 2 years | 8% |
| Over 2 years, up to 3 years | 4% |
| Over 3 years | No SSD payable |
While sub-sales have since decreased for 10 years since the introduction of SSD in 2010, its volume started increasing again in 2021. In fact, more recently, Business Times reported that the number of sub-sales in 2022 has hit a 10-year high with 765 transactions.
With that, today we’re going to look at the sub-sales so far this year, up till 17 March 2023.
Condo gainers that are sub-sales in the first 3 months of 2023
As of writing, we found 106 sub-sale condo transactions that have made capital gains.
Interestingly, out of these sub-sales, 32 transactions (30.2%) had a holding period of five years. Meanwhile, 64 of them (60.4%) had a holding period of four years. The remaining 10 had a holding period of three years.
This means that most of these sub-sale unit sellers do not have to pay the SSD, which would have eaten into their profits.
When we look at the numbers closely, we found that 11 of these sub-sales have actually recorded the highest capital gain in their respective projects. (Do note that these are purely based on the purchase and sale prices, and do not account for other costs such as the SSD.)
| Condo | Size (sq ft) | Bought for, date bought | Sold for, date sold | Capital gain | Years held | Annualised return |
| Parc Clematis | 915 | S$1.45m
27 Oct 2020 |
S$1.83m
3 Feb 2023 |
S$382k
(26.3%) |
3 | 8.1% |
| Midtown Bay | 743 | S$1.91m
24 Nov 2019 |
S$2m
1 Mar 2023 |
S$92k
(4.8%) |
4 | 1.18% |
| Fourth Avenue Residences | 1475 | S$3.51m
26 Nov 2019 |
S$3.83m
22 Feb 2023 |
S$322k
(9.2%) |
4 | 2.22% |
| The Tre Ver | 1108 | S$1.78m
11 May 2019 |
S$2.23m
27 Jan 2023 |
S$444k
(24.9%) |
4 | 5.71% |
| Amber Park | 743 | S$1.85m
21 May 2019 |
S$2.08m
7 Feb 2023 |
S$228k
(12.3%) |
4 | 2.95% |
| Residence Twenty-Two | 1195 | S$1.88m
31 Dec 2019 |
S$2.4m
2 Feb 2023 |
S$525k
(28%) |
4 | 6.37% |
| Treasure at Tampines | 1722 | S$1.92m
20 Aug 2019 |
S$2.6m
12 Jan 2023 |
S$676k
(35.1%) |
4 | 7.82% |
| Riverfront Residences | 1680 | S$2.16m
8 May 2019 |
S$2.75m
6 Mar 2023 |
S$596k
(27.6%) |
4 | 6.29% |
| View at Kismis | 667 | S$1.11m
9 Dec 2019 |
S$1.31m
2 Mar 2023 |
S$200k
(18%) |
4 | 4.23% |
| Daintree Residence | 743 | S$1.23m
22 Aug 2020 |
S$1.43m
31 Jan 2023 |
S$195k
(15.9%) |
3 | 5.03% |
| Ki Residences at Brookvale | 754 | S$1.32m
5 Dec 2020 |
S$1.6m
19 Jan 2023 |
S$276k
(20.8%) |
3 | 6.51% |
Among these top condo gainers, eight of them had a holding period of four years. In comparison, three units had a holding period of less than three years and thus, were subject to 4% SSD.
Nevertheless, for these owners, it probably made sense to sell within three years and fork out the SSD. Because even after accounting for the SSD, the gains are still pretty substantial.
| Condo | Size (sq ft) | Bought for, date bought | Sold for, date sold | Capital gain | Years held | Capital gain after SSD |
| Parc Clematis | 915 | S$1.45m
27 Oct 2020 |
S$1.83m
3 Feb 2023 |
S$382k
(26.3%) |
3 | S$308k |
| Daintree Residence | 743 | S$1.23m
22 Aug 2020 |
S$1.43m
31 Jan 2023 |
S$195k
(15.9%) |
3 | S$138k |
| KI Residences at Brookvale | 754 | S$1.32m
5 Dec 2020 |
S$1.6m
19 Jan 2023 |
S$276k
(20.8%) |
3 | S$212k |
One explanation for the gains is the current boom in the property market, as the units are sold when prices are soaring.
Sub-sales have also become a viable option due to the construction delays brought on by the pandemic. As some projects have taken more than three years to complete, the owners can sell them without incurring the SSD.
And for the buyers, these units are an attractive option. Since they are almost completed, buying a sub-sale unit allows them to get a brand-new unit and cut down the waiting time.
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Planning to sell your condo as a sub-sale? Let us help you get in touch with a property agent.
If you found this article helpful, 99.co recommends What hidden costs are there when selling your house? and 4 units at Reflections at Keppel Bay made a loss in January 2023, the biggest at S$1m.
The post Top condo gainers that are sub-sales from Jan to Mar 2023 appeared first on .
