Thursday, March 29, 2012

Stamp duty hits private home subsales

The 16 percent seller’s stamp duty (SSD) announced in January last year may have caused a slowdown in subsales of private apartments and condos and extended the holding period for subsale transactions.

Despite this, a record 98.1 percent of subsales in 2011 are still deemed profitable even with the SSD. This is because an overwhelming majority of the 2,337 subsale homes last year were purchased before the SSD took effect for units bought after 14 January 2011.

According to caveat analysis by Savills, the average gain per unit for subsales last year hit a three-year high.

However, the SSD, coupled with a moderate growth in condo and apartment prices, limited the number of such subsale properties to just 11 units last year.

Instead, more than half of last year’s subsale properties were transacted back in 2009.

The average profit for every unit also hit a three-year high at 25.4 percent. Alan Cheong, Head of Savills Research Singapore, said the average percentage gain went from 23.9 percent in Q1 to 27.9 percent in Q4.

“If the equity downpayment was 40 percent, the return on equity would have been 59.7 percent to 69.7 percent. This is a remarkable return from an investment holding period of just 2.34 years,” added Cheong.

View the original article here

Source From Property Guru

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