Tag Archives: COV

Focus less on COV, more on latest transacted price.

To reduce the FOCUS on Cash-Over-Valuation (COV) in negotiations during the sale of a flat, the Housing and Development Board (HDB) will only accept valuation requests from resale flat buyers after they have been granted an Option to Purchase by flat sellers. The latest change will take effect from 5pm March 10, 2014. revised hdb procedure

 Previously, sellers usually got a request for a valuation from HDB  first and then negotiated with buyers over how much more or less should be paid. The excess cash over valuation is known as the COV. Buyers and sellers  will now have to agree upon a price first before getting an official valuation and Housing and Development Board (HDB) will only accept valuation requests from resale flat buyers ( yes, only buyer and they have to pay for it ) after they have been granted an Option to Purchase by flat sellers. Under the new rules, buyers who are granted OTP will also have 21 calendar days, instead of 14 calendar days to exercise the OTP, to adjust to the new procedure. The aim is to  get negotiations to focus on recent transaction prices and reduce the focus on COVs. Currently, resale prices are published twice a month. With immediate effect, HDB will also publish daily prices of resale transactions as soon as they are registered.

While the balance between buyers and sellers has been re-titled, the market is still at very high price, is not at its optimal state, and thus it is premature to withdraw cooling measures, Mr Khaw said.

While it is still too early to gauge the impact of this latest policy, I guess the buyers now will tend to make an offer more conservatively  based on recent transaction prices range to avoid not being able to get the loan amount.

Source -  HDB, Straits Time
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When will the dropping stop?

The median Cash-Over Value or COV paid for a Housing Board resale flat fell to zero in February 2014, down from $3,000 in January. This was the lowest median cash over valuation (COV) figure since SRX records began in 2006. It is also the first time COV hit zero since 2006.

About 37 per cent of deals, almost 4 in every 10 deals closed below valuation overall. In contrast, only 29.4 per cent of HDB resale deals closed below valuation during January 2014.   Resale prices fell by 1.8 per cent, which means that price level are now at same level as 20 months ago in June 2012. This was the sharpest month-on-month fall since prices started declining in April last year.And fewer flats changed hands.

COV map Mar 2014

Out of the 28 towns in Singapore.12 towns saw zero or negative median COV, an increase from 7 HDB towns in January.  Bukit Panjang, Punggol, Sembawang, Sengkang and Woodlands clocked negative overall median COVs recorded in February 2014 while Bedok, Bukit Batok, Choa Chu Kang, Geylang, Jurong West, Tampines and Yishun recorded zero overall median COV.

HDB transaction feb 2014 ( COV )

Year-on-year, resale volume dropped 6.3 per cent. According to flash estimates, 734 HDB flats were sold last month in the resale market, a 20 per cent month-on-month drop from the 918 units in January. Rental volume also dropped 13.7 per cent year-on-year. An estimated 1,118 HDB flats were rented in February, 25.3 per cent less than the 1,496 rental transactions in January. On a year-on-year basis, February’s rental volume posted a 11.9 per cent drop from 1,296 flats leased over the same month of last year. 

 

number of HDB transacted Jan Feb 2014

number of HDB Rental transacted Jan Feb 2014

source – Straits Time, SRX, CNA

Good news or bad news?

Cash-over-valuation (COV) for Housing and Development Board (HDB) flats dropped $2,000 from December 2013to hit $3000 on Jan 2014 . The median COV of $3,000 is on par with the previous low in June 2009 during the Global Financial Crisis.

Eight out of 28 HDB towns recorded zero or negative median COV. Sengkang and Punggol led the drop with zero negative overall COVs, while Bishan, Geylang, Jurong West, Sembawang, Woodlands and Yishun recorded zero overall median COV.  We can see that sellers in traditional popular towns such as Bishan ( * Yes, BISHAN ) and geylang which is nearer to city are becoming more realistic now. *Refer to the diagram below

COV 2014 Jan Map

Almost 30% per cent of HDB resale deals were closed below valuation in Jan 2014, an increase from the 20.4 per cent that closed below valuation in December 2013.

Overall, HDB resale prices gained a  0.3 per cent in January 2014. On a year-on-year basis, January’s resale volume posted a 34.6 per cent drop from 1,365 flats sold over the same month of last year to 893 this year.

HDB median rents however are stable with median rents at S$2,300 in January, after two consecutive monthly drops in November and December 2013.

Source : Straits Time, SRX, HDB, CNA 

First annual decline in Resale Price Index (RPI) for HDB since 2005

Image

Average prices of HDB resale flats fell for the first time since 2005 last year. Data released by the Housing and Development Board (HDB) showed that the Resale Price Index  RPI fell 1.5 per cent from 204.8 ito 201.7 n then the last three months of the year 2013 .

Year
Quarter
Index
% Change from Previous Quarter
2013
IV
201.7
-1.5%
III
204.8
-0.9%
II
206.6
0.5%
I
205.5
1.3%
2012
IV
202.9
2.5%
III
197.9
2.0%
II
194.0
1.3%
I
191.6
0.6%
2011
IV
190.4
1.7%
III
187.2
3.8%
II
180.3
3.1%
I
174.8
1.6%
2010
IV
172.0
2.5%
III
167.8
4.0%
II
161.3
4.1%
I
155.0
2.8%
Source – HDB

The number of resale transactions for 2013 dropped 28 per cent to 18,100 — the lowest volume since 1997 since HDB started keeping records. Subletting transactions also fell by 3 per cent from 7,505 cases in Q3 of last year to 7,268 cases in the fourth quarter.

Resale Cases Registered between 1st Quarter and 4th Quarter 2013
Quarter
1-Room
2-Room
3-Room
4-Room
5-Room
Executive*
Total
1Q2013
1
159
1,362
1,523
962
328
4,335
2Q2013
3
185
1,640
1,922
1,070
415
5,235
3Q2013
2
172
1,377
1,670
969
339
4,529
4Q2013
1
132
1,251
1,524
784
309
4,001
Total
7
648
5,630
6,639
3,785
1,391
18,100

 

Source – HDB

Fall in HDB resale price is expected due to the many measures imposed by the government especially the mortgage servicing ratio of 30 per cent and also the maximum loan term of 25 years which I have mention in my previous blog entry in Aug 2013.  This measures reduce the buyers’ ability of getting a higher loan to buy a bigger flat. In addition, Singapore Permanent Resident Households need to wait three years from the date of obtaining SPR status, before they can buy a resale HDB flat. The impact of these policies announced recently on HDB resale prices has slowly surfaced. 

Median Cash Over Value or COV have also drop by quite a fair bit. Interestingly, look at Punggol’s figure in the table below. Average COV is $0 for 4 and 5 Room flats. Will COV continue to drop further this year? Will it draw more potential buyers back to the resale market? We shall see.

Median Cash-Over-Valuation (COV) for Resale Cases Registered in the 4th Quarter 2013
Town
1-Room
2-Room
3-Room
4-Room
5-Room
Executive
Ang Mo Kio
*
$10,000
$15,000
*
*
Bedok
*
$5,000
$15,000
$23,500
*
Bishan
*
$32,500
*
*
Bukit Batok
$7,000
$10,000
$20,000
*
Bukit Merah
*
*
$18,000
$30,000
$42,500
Bukit Panjang
*
$8,000
$3,000
$25,000
Bukit Timah
*
*
*
Central
*
*
*
*
Choa Chu Kang
*
$0
$5,000
*
Clementi
$8,000
$15,000
*
*
Geylang
*
$8,900
$15,000
*
*
Hougang
$5,000
$5,000
$10,000
*
Jurong East
$7,500
$10,000
*
*
Jurong West
*
$9,000
$5,000
$2,000
$20,000
Kallang/Whampoa
*
$10,000
$30,000
*
*
Marine Parade
*
*
*
Pasir Ris
*
$6,500
$8,500
$19,000
Punggol
$0
$0
*
Queenstown
*
$10,400
$37,900
*
Sembawang
*
$4,500
$8,000
*
Sengkang
*
*
$3,000
$5,000
*
Serangoon
$12,000
$15,000
*
*
Tampines
$6,500
$9,500
$10,000
$30,000
Toa Payoh
*
$9,300
$28,000
*
*
Woodlands
*
$8,000
$3,300
$6,000
$23,000
Yishun
$3,900
$7,000
$12,900
*

 

Source - HDB, Straits Time



Post you might be interested -
Cooling measures – Maximum tenure for HDB housing loans cut to 25 years
HDB COV $20000, lowest in 30 months, since 2011
More HDB resale with $0 COV
COV going south again
 


COV going south again

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.

HDB Flat - Hougang

HDB Flat – Hougang

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.

Source – Straits Time, CNA, TodayOnline

Fewer private property owners buying HDB flat.

HDB buyerFewer speculators have been snapping up Housing Board resale flats following a rule change designed to keep them out of the market. Fresh figures show the number of private property owners buying HDB units has been gradually falling over the past three years. It follows a change to the regulations in 2010 that required them to sell off their existing private homes within six months of buying an unsubsidised resale flat. The move was aimed at keeping out speculators, who have been blamed for pushing up prices by buying flats as investments.

Base on HDB’s Statistic, percentage of private property owners buying resale HDB has fall from 11.8% in the first 8 months of 2010 to 4.3% in the first 6 months of 2013.
Fewer Private property owners buying HDB flats

At least for now, the asking price from seller seems more realistic.

Source – Straits Time, HDB

 

HDB median cash premiums hit 4-year low in Aug 2013

With all cooling measures in place, overall median cash premiums for Housing Board (HDB) resale flats continued to fall , reaching a four-year low of $18,000 in August.

Picture credited to : http://180degreehealth.com/

Picture credited to : http://180degreehealth.com/

Data from Singapore Real Exchange (SRX)  showed that Punggol’s executive flats had the lowest cash-over-valuation (COV) by region. Two out of the three transactions there in August were sold below valuation, while the median COV was $13,000 below valuation. – Straits time. How long did we heard this word , BELOW VALUATION?  It seems like the interest for big units have subsided. Might be due to the TDSR and the new cooling measures announced on 27/8/2013.

Without surprise,  the highest median COVs was $120,000, transacted in  Bishan HDB executive flats.

According to Straits time , overall HDB resale prices slipped 0.7 per cent in August 2013, the fourth consecutive monthly drop. This is the first time prices have dropped for four consecutive months since January 2006.

As mentioned in my previous entry, this result comes without any surprise,  I am expecting more zero-COV transactions  and even negative-COV transactions as well in near future. Buyers out there, get your shopping list ready!

Source – Straits Time, SRX, HDB

More HDB resale with $0 COV

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. >

LIANHE ZAOBAO 28072013

LIANHE ZAOBAO 28072013

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.

The overall median COV dipped to a low of S$20,000 in July, the lowest since 2011.

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.

%of $0 COV HDB Transc 2013

%of $0 COV HDB Transc 2013

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.

0A5578D2-EF6A-4162-BFDC-38D5BF4813A9 3E445554-8AAB-40E2-AA54-1DBB3B5F0D1A 2857582E-0198-43E4-B250-652444C32333 ABEAFB67-5FF6-4EA7-B8E2-177D5A16B285 B943C947-CCD6-40B7-AA4C-E056BE656242 BC85CAB7-1080-404E-8F75-FF9A1F458F87 C9B88E93-AC2B-40EC-9A94-40A2ADF73265 DF802F64-45F9-4EA4-8544-8FFA03D5EEB7

Source – http://www.channelnewsasia.com/news/singapore/more-hdb-resale-flats/791022.html

http://www.srx.com.sg/ , HDB, Lianhe Zaobao

HDB COV $20000, lowest in 30 months, since 2011

HDB Flat at Bishan, once of the area with highest COV

HDB Flat at Bishan, once of the area with highest COV

According to data from major property agencies compiled by the Singapore Real Estate Exchange (SRX)Housing Board ( HDB ) cash-over-valuation (COV) continued a steady decline in July to $20,000, its lowest point since January 2011.

Compared to the peak of S$35,000 recorded in January this year, SRX said overall COV has dropped by 43 per cent year-to-date. Year-on-year, July’s resale volume represented a 36-per-cent drop from the same period in 2012. Overall HDB resale prices also dropped for the third consecutive month, slipping 0.5 per cent.

However, the number of HDB flats sold in resale market stayed relatively flat with 1,270 exchanging hands in July, similar to June’s 1,266 resale cases. This was a 36 per cent drop from the same period in 2012.

 

 

Source – http://www.straitstimes.comhttp://www.hdb.gov.sg

http://www.srx.com.sg/

Release of 2nd Quarter 2013 Public Housing Data

Date issued : 26 Jul 2013
 This press release provides the housing data for the HDB resale and rental markets in 2nd Quarter 2013.

HDB Resale Market 

2The Resale Price Index (RPI) rose slightly by 0.5% from 205.5 in 1st Quarter 2013 to 206.6 in 2nd Quarter 2013 (see Annex A  (PDF 26KB)). This is lower than the 1.3% growth in the previous quarter and the lowest quarterly growth since 1st Quarter 2009.
3Resale transactions increased by 21% from 4,335 cases in 1st Quarter 2013 to 5,235 cases in 2nd Quarter 2013 (see Annex B  (PDF 10KB)).
4The median resale prices and Cash-Over-Valuation (COV) amounts in the various towns are tabulated in Annex C  (PDF 18KB) and Annex D  (PDF 17KB).

HDB Rental Market 

5The median subletting rents in the various towns in 2nd Quarter 2013 are tabulated in Annex E  (PDF 17KB).
6Subletting transactions rose 6% from 7,410 cases in 1st Quarter 2013 to 7,891 cases in 2nd Quarter 2013 (see Annex F  (PDF 9KB)). The total number of HDB flats approved for subletting rose 1.0% from 44,274 units in 1st Quarter 2013 to 44,706 units in 2nd Quarter 2013.

Upcoming Sales Launches

7In the first half of 2013, HDB offered 12,144 new flats under its Build-To-Order (BTO) exercises and another 3,100 flats under a Sale of Balance Flats exercise. The HDB is on track to launch 25,000 BTO flats for the whole of 2013.
8In Jul 2013, HDB will offer about 3,800 BTO flats in Bukit Merah, Sengkang, and Yishun. More information on the flats is available on the HDB InfoWEB. Starting from the Jul 2013 BTO exercise, eligible single Singapore citizens will have an additional housing option of buying a 2-room new flat in the non-mature estates.

Sourced from : http://www.hdb.gov.sg

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