They have not even been built yet, but apartments at popular new projects like The Sail @ Marina Bay are changing hands

at a rate not seen in almost a decade.

Sales of these uncompleted homes, known in the industry as sub-sales, almost doubled to 1,184 between April and last month for private non-landed homes, according to new figures released by property firm Savills Singapore yesterday.

Such transactions comprised 13.9 per cent of all private home sales in the June quarter - up from 6.3 per cent in the first three months of this year and the highest level in almost 10 years.

Sub-sales are often used to measure speculative activity in the private home market and as such are closely watched - now more than ever, as the Government tries to gauge how far it should go to calm the red-hot property market.

The latest figures show that more buyers are quickly reselling recently-bought homes, adding to the growing property frenzy.

But while the numbers are rising fast, property consultants are not too concerned yet.

‘It’s surprising that sub-sales have doubled in three months, but they still haven’t reached the same levels as in 1996, which triggered government intervention,’ said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

At the height of the property boom in 1996, sub-sales reached 28.4 per cent of all home sales.

But Mr Mak warned: ‘If it keeps going at this rate, the authorities may step in.’

At projects such as the uncompleted Sail, sub-sales have been roaring along. There were 61 Sail units resold three times each in the last two years, according to investment bank JP Morgan.

Six more units changed hands four times, and one unit found new buyers five times.

Most of these sellers made big bucks, thanks to escalating prices - some units have tripled in price since their 2004 launch.

One buyer paid $750,000 for a unit in early 2005 and resold it for $1.8 million recently, said Savills.

But not all sub-sales turn profits.

At Icon in Tanjong Pagar, one seller made more than $314,000 in three months, while another resold his unit at a $348,000 loss after two months.

Savills, whose estimates were taken from the Urban Redevelopment Authority’s caveat database ahead of official Government figures due on July 27, pointed out that more sub-sales do not necessarily imply more speculation.

‘These sellers may not have bought their units with the intention to speculate,’ said Mr Ku Swee Yong, Savills’ director of marketing and business development.

‘But prices have risen so quickly that they are tempted to cash in.’

Indeed, projects in the prime districts - where home prices have shot up the fastest - made up the bulk of the sub-sales in April to June, said Savills.

More than half the sub-sales in the period took place in Districts 1 to 4 and 9 to 11, which cover Orchard, River Valley, Bukit Timah, Newton, Shenton Way, Marina Bay and Tanjong Pagar.

Sub-sales accounted for about one in five of all home sales in these areas. But some districts saw higher figures of up to 80 per cent.

In District 2, where Icon is located, four out of every five sales were sub-sales. In District 1, where The Sail is, the figure was 64 per cent.

The proportion of sub-sales was a lower 25 per cent in District 9 and only 11 per cent in District 10.

The Sail and Icon topped the sub-sale list in the quarter, with 81 and 71 deals, respectively. Sky@Eleven in Thomson Road was third with 51, while City Square Residences and Citylights in the Jalan Besar area saw 40 deals each.

With most of these projects due to be completed soon, Mr Ku added that the spike in sub-sales could backed by genuine buying demand from displaced collective sale sellers.

This may be a balm to the Government, which has periodically referred to low levels of sub-sales as a sign that rising property prices are fuelled by genuine home demand.

Last year, there were just 989 sub-sale deals, accounting for a mere 4.1 per cent of total private home sales.

Source: The Straits Times, 14 July 2007