Subsales are increasing as buyers take advantage of the strong rise in prices.

The Urban Redevelopment Authority (URA), according to its data, reported 355 subsale deals in the third quarter 2023. This is the highest quarter-to-quarter figure since Q1 2013 when there were 395 subsale transactions.

Over 60% of the subsale deals in Q3 were from condominiums located in the Outside Central Region or in suburbs, while 36% came from the Rest of Central Region. The rest came from the Core Central Region.

Subsale refers to the sale of an apartment purchased directly from the developer and sold to another buyer prior the completion of the project.

Market watchers attribute the recent quarter’s high subsale volume to a rush of completions after Covid-19 caused delays in 2023, as well as opportunistic sale as market conditions improved.

The completion of 19,050 residential units, excluding executive condominiums, is expected this year. This will be the highest total for 2017.

This figure includes projects which were originally scheduled to be completed sooner but were delayed by the pandemic.

Private residential property buyers can avoid the Seller’s Stamp Duty if they sell more than three year after purchasing their home. A SSD of up 12 percent is due for homes sold within three year of purchase.

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The property market has been more buoyant in recent years, so many of the sellers who participated in subsale deals in Q3 bought their units in between 2018 and 2020. This means that they were likely to have enjoyed a price increase.

The URA’s index of private residential property prices has increased by approximately 43,5% cumulatively between the third quarter of 2017 and the third quarter 2023.

The median unit price for new non-landed homes in the OCR, excluding executive condos, has increased from $1382 per square feet (psf), in Q1 2018, to $2,080 in Q3 2023.

Property prices have increased significantly in recent years. This could have led some homeowners to sell unfinished homes.

Some owners decide to subsell their homes on the secondary market to take advantage of the recent property boom.

99 percent of subsales in the first nine-month period of 2023 were profitable. This is without considering transaction costs or tax.

URA Realis data indicates that during this time, subsales made an average profit per transaction of over S$252,800 and an annualised average profit of 20 percent.

Some buyers may have decided to sell their properties to make money rather than hold onto them during high interest rates.

The interest rates have remained high throughout 2022. Some buyers may be investors who do not intend to use the property themselves and now face high mortgage payments. Some may have been scared off by the mortgage payments and sold.

The average three-month Singapore Overnight Rate (Sora), which was about 1.5 percent in January 2019, rose to about 3.8% in November 2023.

Riverfront Residences and Treasure at Tampines are among the 10 most popular subsale developments this year.

The bumper crop of Q3 subsales has pushed the total number of transactions for the first three-quarters of this year to 883, surpassing the 765 recorded in 2022. However, they are still well below the previous record. Subsales in 2007 reached 4,863 which is the highest level since 1996.