SINGAPORE – The most profitable subsale transaction in the first half of this year in the Core Central Region (CCR) yielded a gain of about S$3 million.
It involves a low-floor unit at Goodwood Residence in Bukit Timah Road purchased from developer GuocoLand in April 2010 at S$8.5 million or S$1,815 per square foot and subsold at S$11.5 million or S$2,456 psf in May this year.
The transaction also produced the highest percentage gain for a subsale deal – 35 per cent – in the period, shows a caveat analysis by Ngee Ann Polytechnic’s School of Design & Environment.
Subsales are secondary market transactions of units in projects that have yet to receive Certificate of Statutory Completion (CSC) and where the titles for all the units have yet to be issued.
Subsales – tracked as a barometer of the level of speculative activity in the property market – have slowed in the private housing segment in recent years, thanks to cooling measures such as the seller’s stamp duty (SSD), aimed at deterring short-term trading of residential property, as well as the June 2013 total debt servicing ratio framework that banks have to take into account when granting new property loans to people.
Ngee Ann’s analysis also showed that subsale gains of about S$500,000-plus each were generated by two high-floor units at Centennia Suites in Kim Seng Road. They were acquired in separate transactions in March 2010 and divested in the subsale market earlier this year.
A quarter of the non-landed private homes in CCR – which covers the traditional prime districts 9, 10 and 11, the Downtown Core planning area and Sentosa – that changed hands in the subsale market in H1 resulted in a loss for the sellers.
Quantum-wise, the biggest loss of S$800,000 was chalked up by an apartment on a low floor of the Waterscape at Cavenagh condo.
Its owner bought it from the developer back in June 2010 for S$3.9 million or S$2,059 psf and offloaded it in May this year at S$3.1 million (S$1,636 psf).
At the Reignwood Hamilton Scotts, a mid-floor unit acquired in September 2009 at S$9.13 million was subsold in May this year for S$8.5 million, producing a loss of over S$600,000.
In the Dunearn Road area, an apartment at The Glyndebourne picked up from the developer at S$3.2 million in November 2010 changed hands in April at S$2.8 million – a 13 per cent loss. Subsales of four units in Robinson Suites in April were in the red to the tune of S$300,000-plus each or about 22-23 per cent; the units were bought from the developer in December 2010.
In Outside Central Region, where mass market condos are located, the most profitable subsale in H1 – with a S$746,000 gain – was for a unit at Hundred Trees in West Coast Drive.
Its owner paid S$1.39 million for the low-floor in October 2009 and divested it in the subsale market this March at S$2.14 million. Percentage wise, the gain was 54 per cent.
In all, there were seven subsale transactions at Hundred Trees in H1, all profitable.
At the Tree House in Chestnut Avenue, the owner of a high-floor unit who paid S$1.13 million in May 2010, found a buyer for the unit at S$1.66 million this May.
Slightly over 97 per cent of the 142 subsales in OCR were profitable.
The four deals that chalked up a loss involved units at Kovan Regency (about S$89,200), Seastrand (S$46,200), Ripple Bay (S$5,500) and Euhabitat (S$1,700).
Profit or loss was calculated by comparing the H1 subsale price for the unit against the price at which the unit had previously changed hands; SSD was also factored in where applicable but not any other costs.
The current subdued market provides an attractive hunting ground for first-time buyers. As Ong Choon Fah, DTZ SE Asia chief operating officer, observed: “The savvy have started to look for good deals from motivated sellers, including those who bought from developers.
The trend of subsale transactions involving a relatively long holding period is set to continue.”