Ultimate Handbook on HDB Income Ceilings for BTO, Resale Flats, and Executive Condominiums
TLDR Owning an HDB home in Singapore depends largely on income ceilings. The HDB income ceiling limits monthly household earnings...
Read More
TLDR
In this blog post, the writer delves into the Singapore property market, particularly focusing on the effectiveness of quick buy-and-sell strategies. Analyzing data from 2017, it was found that selling within three to four years can lead to an average profit of 15.8%. The post highlights key differences between new-to-resale and resale-to-resale deals, emphasizing the impact of early bird offers and Seller’s Stamp Duty exemptions. It also advises on potential pitfalls such as fluctuating developer prices, prepayment penalties, transactional costs, and the importance of timing in property investments. The writer concludes by offering strategic real estate advice and emphasizing the need for a data-driven approach tailored to individual circumstances.
Remember back in the day when you could buy a place in Singapore and sell it off for a neat profit only after a few months, or even days?
Take a peek at what happened in 2007 at Pandan Valley. The quickest deal there lasted a mere 96 days. Can you believe the seller pocketed a whopping $420,000 profit over three short months? It’s mind-blowing! However, this was a huge factor behind the property bubble we experienced then.
Fast forward to now, Singapore’s property market is much more regulated. Sure, you still have the option to buy and sell homes quickly, but there’s a catch. The current Sellers Stamp Duty (SSD) of 3 years discourages such hasty transactions. This often means trying to get rid of a property within three to four years from buying it, sometimes even before it’s fully built (a sub sale transaction). So, how effective is this quick buy-and-sell strategy in today’s Singapore? Let’s dive in and find out:
The General Answer To The Question
Alright, let’s dive right into this interesting study. We took a close look at folks who decided to sell their properties within a span of three to four years, starting from March 2017.
This time frame gave us a pretty solid batch of “flip” deals, adding up to 1,984 to be exact. Now, here’s the interesting part – we observed an average profit of about 15.8%, which translates to a cool $205,899 on the dollar scale.
Oh, and just to clarify, this considers all types of sales: from those selling newly acquired units to those reselling previously owned ones.
So in a nutshell, can you make a profit by selling within three to four years? Well, the data says yes. On average, sellers did see some nice gains. But remember, 2017 was a buyer’s market with lower prices that later soared, particularly after the Covid situation hit.
Now, let’s dig a little deeper into this …
The Difference Between New-To-Resale, And Resale-To-Resale
Here’s the scoop – the way new property launches are sold has a unique significance. Early bird offers make these units cheaper during the initial launch phase, acting as a kind of ‘loss-leader’ strategy. You can read up more on the developer’s sales tactics right here.
This could be a nudge for some to try their hand at flipping properties. Imagine buying a $1.5 million unit and selling it in year four (when there’s no more Seller’s Stamp Duty), you’re looking at a sweet profit of $150,000.
But when it comes to resale-to-resale deals, flips usually occur when a buyer stumbles upon a fantastic bargain (like when the seller urgently needs to offload the property under its valuation).
Here’s what we’ve noticed about the differences:
It appears that investing in a new launch tends to yield better returns for those who sell from year four onward. Selling just after the SSD is waived, however, seems to fetch lower average profits.
When talking about new launches, we must acknowledge the uneven distribution in volume. Most transactions take place from year four onwards. But remember, this might mean that the statistics include more initially profitable condos, which boosts the average gain.
Moreover, a majority of buyers lean towards purchasing in the fourth year when it comes to new launches. Why? Well, in the first three years, the new condo is still a work in progress. Between the third and fourth year, the development may face some growing pains. By snapping up the unit close to or upon completion, a buyer can move in or begin renting it out faster. This might be why sellers in year four often see higher profits.
Another reason might be that the actual condo exceeds or matches the show flat’s promise, leading buyers to willingly pay more..
In contrast, with resale-to-resale transactions, it doesn’t really matter whether the deal goes down in the third or fourth year. From the buyer’s perspective, there’s less of a distinction compared to a new launch since all resale units are move-in ready. Likely, the profits will be smaller as there are no ‘early bird’ incentives like those offered by developers. Bear in mind, this doesn’t take into account the higher interest cost associated with resale developments.
Lastly, here are a few things to remember:
1. Developers Might Drop Prices Later – There’s No Guarantee They Won’t
Just because there’s a hefty early bird discount, don’t jump to the conclusion that you’re guaranteed a profit down the line. There’ve been instances where developers barely increase the prices in subsequent sales stages, or sometimes, they even offer bigger discounts to those who buy later.
We’ve seen condo prices drop during later launch phases and even blowout sales due to ABSD deadlines. Changes in developer pricing or relaunches can impact your profit margins and also affect the pool of potential buyers for your sub sale unit.
2. Keep An Eye Out For Prepayment Penalties In Your Home Loan Package
Selling your home? Remember, you’ll have to pay off that remaining mortgage. Now, with many loans, there might be a catch – a penalty that’s about 1.5 times the amount you haven’t paid back yet. So, if you’ve only owned your house for a few years, that ‘unpaid amount’ could be pretty hefty.
Here’s a tip: try to get a home loan that lets you off the hook for the penalty if you sell, or at least reduces the penalty a bit. But make sure to check this before you sign the dotted line on your loan agreement. Once it’s signed, it’s too late to change anything.
3. Switching Properties Will Incur Additional Transactional Costs
Before you jump the gun and sign off on a sub sale, take a moment to consider the expenses of hunting for a new home. Say you’ve been renting while your condo’s getting built—selling could mean shelling out for rent for another couple of years.
It’s a good idea to chat with your real estate agent first. See if they can help you shortlist some other potential properties before you part ways with your current one. Imagine this—you sell in a hurry, then discover there’s not a single property within your budget in the same neighborhood, even after adding in your sale profits. It happens! Especially post-Covid, we’ve seen how property prices can skyrocket in just three to four years.
4. Paying A Higher Premium For Units after TOP
Purchasing a nearly finished or recently completed property can be pretty tempting, right? But remember, if you decide to buy in the third year, there’s a good chance the seller will include their SSD tax in the asking price. And if you wait until after completion, you’re likely to shell out more.
For all you landlords out there, this is where you’ll need to put on your math hats. You’ve got to figure out whether the ability to start renting immediately offsets that extra cost you’re paying. As for owner-investors, you might have to come to terms with potentially smaller profits down the road, just to enjoy the perk of moving in immediately.
Flipping your unit might seem like a no-brainer way to make quick cash. But trust me, it’s not always as simple as it seems and could end up being a real headache. After all, in a hot market where flipping property is easy, house prices are also skyrocketing. So, you might find yourself right back where you started if the price of your next property has shot up too.
Should You Buy, Sell or Wait?
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.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
Top 5 Factors To Consider When Choosing Between A Resale Condo And A New Launch In Singapore
The decision to invest in a condominium in Singapore can be a challenging one, especially when faced with the choice...
Read More
Why Home Staging Is Important In A Competitive Real Estate Market
Singapore's property scene has always been a powerhouse, effortlessly combining the new with the old. It's a real estate playground...
Read More
5 Tips : How To Spot A Good Investment Opportunity In Singapore’s Property Market
Singapore's property market offers a plethora of investment opportunities for both local and foreign investors. To spot a good investment...
Read More
Subscribe to Jayson Ang’s Singapore Property Newsletter
TLDR Jayson Ang's Singapore Property Newsletter offers valuable insights on real estate investments, market trends, and expert advice. The newsletters...
Read More
The Shifting Landscape: Why More Singaporeans Are Opting for Larger HDB Flats Over Condos for Upgrades in 2025
TLDR By 2025, more Singaporeans are choosing larger HDB flats over condominiums as their upgrade path. Rising condo prices, especially...
Read More
Singapore’s HDB Projects: From Unique Landmarks to Just Another Brick in the Wall?
Take a look at this chill spot in Yew Tee. Someone's gone all out to make it feel like an...
Read More
Top 5 Japanese Restaurants in Singapore
Singapore, a melting pot of diverse cultures and flavors, offers an incredible array of dining experiences for food lovers. Japanese...
Read More
5 Reasons : The Benefits Of Investing In A Property With Good Access To Healthcare Facilities In Singapore
Investing in a property with good access to healthcare facilities in Singapore offers numerous benefits for both homeowners and investors....
Read More
$1.5 Million HDB Flats: Their Locations and Reasons Behind Being Singapore’s Priciest Public Housing
TLDR Singapore’s HDB resale market has entered a new phase, with at least 13 flats sold for $1.5 million or...
Read More
Buy a $1M Resale HDB or a $1M Resale Condo?
TLDR When comparing a million-dollar HDB flat to a private property of the same value, the HDB flat offers more...
Read More
The “Sell One, Buy Two” Strategy in 2025: Real Stories from Singaporean Homeowners
The "Sell One, Buy Two" strategy gained popularity in Singapore after the Additional Buyer's Stamp Duty (ABSD) was introduced in...
Read More
The Dynamics of Being the First Seller in a New Condo: Risks, Rewards, and Strategies
TLDR Being the first seller in a new condo project offers both opportunity and risk. With no prior transactions, you...
Read More
Identifying a Good Investment Property: A Guide
TLDR When it comes to navigating the real estate market in Singapore, understanding key factors can make a significant difference...
Read More
5 Things to do When You Go For A Property Viewing In Singapore Part 2
5 Things to do When You Go For A Property Viewing In Singapore Part 2 Here are 5 more things...
Read More
The Lifecycle of an HDB Flat: Essential Stages for Owners and Buyers
TLDR HDB flats in Singapore, home to 80% of residents, begin as state land acquired at fair market value. The...
Read More
The COV Conundrum: Navigating Singapore’s Property Premium
TLDR Cash Over Valuation (COV) is the difference between a property's official valuation and the price a buyer is willing...
Read More
35 Brand New Condominiums Nearing Their ABSD Deadline 2023
TLDR The blog post discusses the looming ABSD deadline for several new launch condos in 2023, highlighting the impact on...
Read More
5 Reasons : Can Your Real Estate Investment Hedge Against Inflation?
Inflation is an economic phenomenon that can have a significant impact on an individual's financial well-being. As the cost of...
Read More
Exploring Singapore: The Top 5 Surprising Facts You Never Knew
Singapore, a city-state in Southeast Asia, is known for its rich cultural heritage, diverse population, and vibrant food scene. This...
Read More
