In a remarkable turn of events, sub-sale volumes in Singapore's private housing market soared to their highest level since 2013, reaching 1,294 transactions in 2023. This represents a staggering 69.2% increase from the previous year, marking the second consecutive year of robust growth in sub-sales. Despite this surge, current levels remain far below the peak seen in 2007, indicating a tempered landscape compared to the past.
The rise in sub-sales is attributed to the recent uptick in home values, as well as delays and disruptions in the construction industry caused by the pandemic. Investors have seized the opportunity presented by delayed completions and rising prices, making sub-sales more lucrative.
A breakdown by region reveals that properties in the suburban Outside Central Region (OCR) generated the highest capital gains, followed by the city fringe (RCR) and prime Core Central Region (CCR). This trend underscores the varying dynamics across Singapore's housing market segments.
Real estate agents play a pivotal role in encouraging homeowners to "recycle" their capital through sub-sales, driven partly by higher commission rates offered by property developers. Additionally, buyers waiting for uncompleted properties benefit from a progressive payment schedule, enhancing their return on investment.
Looking ahead, while the sub-sales market has experienced sustained growth over the past four years, it is unlikely to continue its upward trajectory in 2024. Cooling measures, economic uncertainties, and a high-interest-rate environment are expected to dampen market sentiment, leading to a potential decrease in sub-sales activity.
Summary Highlights:
- Sub-sale volumes in 2023 reached 1,294 transactions, the highest since 2013.
- Sub-sales surged by 69.2% compared to the previous year.
- Properties in the suburban OCR recorded the highest capital gains.
- Real estate agents play a key role in promoting sub-sales.
- Cooling measures and economic uncertainties may impact sub-sales in 2024.
As the real estate landscape continues to evolve, it is essential for buyers, sellers, and investors to stay informed about market trends and developments. To remain updated on the latest insights and opportunities in Singapore's dynamic property market, reach out to us today.