CASH premiums or Cash Over Valuations (COVs) for Housing Board Resale flats have fallen further this month. The median COV for November 2013 was S$8,000. Last month, the median COV was $11,444 in October. Median COVs have been falling steadily this year. The fall in median COV marked the first time since July 2009 that cash premiums for HDB resale flats fell below $10,000.
Meanwhile, 13.1 per cent of HDB resale deals closed below valuation in November, up from October’s 8.5 per cent. Sengkang, Choa Chu Kang, Jurong West, Woodlands and Hougang saw the most numbers of negative COV deals last month. Notice that this few areas do have a few number of BTO launches and Sale of balance flats recently?
Expect more dips in COV in the next few months. This is due to the recent cooling measures, and massive launch on HDB BTO flats by HDB. It seems like mortgage servicing ratio limit is a very effective cooling measure to cool down the property market in Singapore. In fact, it is observed that more sellers are asking for very reasonable and more realistic price for their property. Buyers may consider to relook into resale market.
Overall HDB resale prices dropped 0.6 per cent in November, reaching the lowest level since September 2012.
- 10 ways the URA’s Draft Master Plan 2013 will affect your life (paulngproperty.wordpress.com)
- Singapore Property Market Cooling Measures
- Cooling measures – Maximum tenure for HDB housing cut to 25 years.