TLDR
A recent sub-sale transaction in Midtown Modern set a new record with a 2-bedroom home selling at $3,150 psf. Selling before TOP can lead to substantial profits, even after paying the Seller Stamp Duty. Avoid paying 25% in the progressive payment plan by selling your Option to Purchase before TOP. Properties like Sky Everton, Treasure at Tampines, and The Florence Residences have seen significant increases in their psf prices for resale transactions. The demand for condos near TOP is high due to newer units in better condition, reducing the need for renovations. Consider collaborating with a real estate expert like Jayson Ang to market your sub-sale property effectively. Buyers should weigh their options carefully and seek expert advice before making decisions in the current real estate market landscape.
A new record for the highest price per square foot for a 2-bedroom home in Midtown Modern was set at $3,150 psf.
The property was sold for $2,000,000, even though it only measures 635 sq ft.
This sale is considered a sub-sale, which means that the condo unit was bought from the developer and sold to another buyer before completion.
The seller purchased the property originally for $1.744 million in 2021 and had to pay a 4% Seller Stamp Duty (SSD) due to buying it between 2-3 years ago.
The SSD rate is 12% in the first year, 8% in the second year, and 4% in the third year after the purchase date.
Despite paying the tax, the seller still made a profit of over $170k.
If you bought a condo unit with the intention of selling it when the development is completed, then you should definitely consider doing the same thing.
Additionally, if you received an early bird discount when purchasing the unit, it may be enough to cover the 4% SSD. This way, you can use your gains for your next home purchase.
Developers offer appealing payment plans that require an additional 25% payment upon completion of a property, known as TOP.
To avoid this payment, buyers can sell their Option to Purchase before the TOP deadline.
To identify condos that are suitable for selling before TOP, we will focus on fully sold out properties that are expected to be ready in 2023.
Prospective buyers who missed out on the opportunity to reserve a unit in any of these recent property launches will now have the chance to acquire their desired condominium.
However, since there are no more untaken units available directly from the developer, they can purchase from current homeowners.
These properties have experienced notable increases in their per square foot (psf) prices for resale transactions.
For instance, Treasure at Tampines was initially sold at approximately $1,400 psf but has been selling at an average of approximately $1,600 psf over the last three months.
Please note that the recorded transactions for Sky Everton were limited to only 2-3 and do not provide a comprehensive reflection of the overall market’s price growth.
This is a positive sign that there is a high demand for newly-built condos that are ready for occupancy and located near the top of the building.
Buyers are willing to pay more for these types of units. Sub-sale units are generally newer and in better condition than resale condos, requiring less renovation or upgrades.
This means that buyers can move in immediately without having to spend extra money on renovations.
Those who do not want to wait for a new condo to be completed or spend money on renovations with a resale unit may be more interested in purchasing a sub-sale unit, even if it comes at a higher price.
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
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