More people are selling their Housing and Development Board (HDB) flats in the resale market without a Cash-Over-Valuation (COV). < ( Cash-Over-Valuation (COV) is the difference between the resale price and the market value of the flat. >
The Singapore Real Estate Exchange (SRX) said transactions involving $0 Cash-Over-Valuation (COV) have more than tripled, from 14 in January 2013 to 49 in July 2013.
There is also a trend that more people are selling their flats even below that level – without any cash premium (COV) .
Zero-COV transactions made up 1 per cent of all HDB resale transactions in January 2013 and have progressively went up to 5.7 percent in August 2013 so far.
Base on my experiences, Previously, it usually took us about 1 to 2 months to close the deal in the resale market. But now, it may took us as long as 4-6 months.
A lot of sellers are still asking for high COVs despite the fact that the buyer pool is shrinking because of the January cooling measures , the ramp up in BTO (Build-to-Order) supply, the new TDSR policy, and the latest cooling measures by HDB implemented on 27th August 2013.
According to SRX data, from the beginning of the year 2013 till July 2013, 164 zero-COV transactions were recorded
The top five towns that have seen the most zero-COV transactions are Jurong West, Hougang, Woodlands, Punggol and Sengkang.
These are towns where a lots of new BTO projects were launched by the HDB in the past year. These areas are also affected by the Ethnic Integration Policy (EIP) and SPR Quota which shrink the potential buyer group even further.
With more residential units ( BTOs, EC, Private Condos ) being completed this year, analysts said more sellers can be expected in the HDB resale market. Which means that we will be expecting more zero-COV transactions can be expected, and even some negative-COV transactions as well.
Our advice to seller and buyers –
– for sellers, you have to be more realistic with the asking price as you are not only competing with the huge ramped up supply for new residences, but with the new policy initialed by the government too. Even though HDB resale flats are being sold with zero cash premium at valuation level, you are still likely to make a profit from your transaction.
-for buyers, if you are serious buyer, it may be time to go shopping again as many units in the resale market are asking at very reasonable price. Engage a responsible agent to serve you and you will be rewarded.
- HDB COV $20000, lowest in 30 months, since 2011 (paulngproperty.wordpress.com)
- A rough guide to buying an HDB for single Singaporean. (paulngproperty.wordpress.com)
- Cooling measures – Maximum tenure for HDB housing loans cut to 25 years (paulngproperty.wordpress.com)
- Release of 2nd Quarter 2013 Public Housing Data (paulngproperty.wordpress.com)
- HDB launches more than 500 two-room flats, Single Singaporean can apply. (paulngproperty.wordpress.com)