About 25 percent of those who sold a private apartment or condominium for a profit in the subsale market during the first four months of 2010 had owned the unit less than a year, according to analysis by Savills Singapore.
That is higher than 19.7-percent of owners who held their properties within a year before divesting them in the subsale market for a profit during the fourth quarter last year. The figure for Q3 2009 was 18.2 percent.
Market watchers suggested that the higher proportion of subsales, which involve a sub-one year holding period, may have underscored the announcement made by the government on February 19 imposing a seller’s stamp duty to homebuyers who sell their private homes within a year of acquisition in a bid to prevent real estate speculation.
Tracked as a gauge of property speculation, subsales are secondary market transactions involving properties that have yet to receive Certificate of Statutory Completion.
One of the most lucrative subsale deals made this year with a sub-one year holding period involved a property of about 3,900 square feet at Urban Suites on Hullet Road, which was bought from a real estate developer in January 2010 for $8.8 million and sold for $10.9 million two months later, resulting in an effortless $2.1 million profit.
Then a 46th level unit at Marina Bay Residences, which transacted in the subsale market three months ago for almost $8.3 million – almost $2.2 million above what the original seller had paid for the property seven months earlier.
Savills, which has studied URA Realis caveats data until 12 May 2010, traced 969 subsale deals for non-landed homes during the first four months of the year for which there were some caveats of previous transactions. It identified 923 gains from these matches and of these, 24.3 percent or 224 involved holding periods below one year.
Just one unit had been kept for less than a year among the 46 subsales that incurred a loss during the first four months of this year.
Savills looked at holding periods for overall subsale deals as well, regardless if they were profitable, and it showed that 50.2 percent of the 969 properties disposed of in the subsale market during the first four months of this year had been bought three years ago, the previous peak year for the real estate market. Another 25.8 percent were acquired in 2009 and 13.4 percent in 2006.
“Going ahead, it will be harder to make short-term gains from property as we expect the market to stabilize,” said Peter Ow, managing director for residential services at Knight Frank.