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26-01-2013, 07:32 AM
At this rate, will we see $100,000 COV (just like COE!) soon?
The Straits Times
www.straitstimes.com
Published on Jan 26, 2013
Cash premiums for HDB resale flats rose in last quarter
By Daryl Chin
CASH premiums for Housing Board resale flats climbed in the fourth quarter of last year, before the latest round of property- cooling measures were introduced.
The cash-over-valuation or COV - the quantum above a flat's valuation which buyers pay in cash - went up in most estates and for most flat types in the fourth quarter of last year, compared with the preceding quarter.
With the seventh round of property cooling measures taking effect in January, analysts expect COVs to moderate in the coming months.
ERA realtor Eugene Lim said the new property-cooling moves are expected to stabilise prices, and if the supply of new flats draws away demand, resale flat prices and COVs will moderate further.
About 110,000 flats are expected to be built in the coming years.
In the last quarter, the median COV for four-room units in Toa Payoh, for instance, rose to $67,800 from $45,000 in the third quarter while that for executive units in Tampines spiked to $65,000 from $45,000.
The upward momentum was also reflected in data from the Singapore Real Estate Exchange (SRX), which collects transaction information from larger property firms.
The median COV rose for all flat types but accelerated most for executive units, from $42,000 to $53,000 over the same time period.
The overall median figure was $34,000 in the last quarter of last year, according to the SRX, just shy of the $37,000 peak reached two years ago.
Property analysts said demand was being driven by those who are ineligible to buy new flats - despite a greater roll-out by the HDB - but have bigger budgets to pay for cash premiums. They include permanent residents (PRs) and singles.
Some HDB flat owners, while eligible to apply for new flats, may have been opting for resale units if they wanted to move into a new home quickly.
"Larger flats typically attract those with deeper pockets. If they are looking for space, units like executive flats, or even old five- roomers, will offer the best prices per sq ft," said Chesterton Suntec International's research head Colin Tan.
PropNex chief executive Mohamed Ismail said the price resilience of the HDB resale market is due to unabated demand and a tight supply.
According to the HDB, prices climbed 6.6 per cent for the whole of last year while the number of resale transactions went up marginally by 2 per cent from the preceding year.
Some 25,094 flats changed hands last year, compared to 32,257 units in 2010.
"HDB flats are viewed as a valuable asset by most owners, and they prefer to rent them out if they can, rather than sell them," said Mr Ismail.
The number of subletting approvals given by the HDB went up by 4 per cent last year, compared to two years ago.
Many owners, he added, had complained of difficulties in buying private property as prices have risen to record highs.
Said businessman William Ong, 43, who is asking for at least $55,000 in COV for his four-room Bishan home: "Why should I budge? If I move, or downsize, it should be made worth my while."
Earlier this month, the Government capped the debt servicing ratio for HDB flat buyers to 30 per cent of their monthly income, if they borrow from a bank, to prevent overstretching their finances. PRs will now have to pay a 5 per cent additional buyer's stamp duty on their first purchase.
"Cash premiums for larger flats might fall up to 20 per cent with the new measures but we are still seeing strong demand this year," said Mr Ismail.
SRX data shows that median COVs have remained fairly constant in the first three weeks of this year.
darylc@sph.com.sg
The Straits Times
www.straitstimes.com
Published on Jan 26, 2013
Cash premiums for HDB resale flats rose in last quarter
By Daryl Chin
CASH premiums for Housing Board resale flats climbed in the fourth quarter of last year, before the latest round of property- cooling measures were introduced.
The cash-over-valuation or COV - the quantum above a flat's valuation which buyers pay in cash - went up in most estates and for most flat types in the fourth quarter of last year, compared with the preceding quarter.
With the seventh round of property cooling measures taking effect in January, analysts expect COVs to moderate in the coming months.
ERA realtor Eugene Lim said the new property-cooling moves are expected to stabilise prices, and if the supply of new flats draws away demand, resale flat prices and COVs will moderate further.
About 110,000 flats are expected to be built in the coming years.
In the last quarter, the median COV for four-room units in Toa Payoh, for instance, rose to $67,800 from $45,000 in the third quarter while that for executive units in Tampines spiked to $65,000 from $45,000.
The upward momentum was also reflected in data from the Singapore Real Estate Exchange (SRX), which collects transaction information from larger property firms.
The median COV rose for all flat types but accelerated most for executive units, from $42,000 to $53,000 over the same time period.
The overall median figure was $34,000 in the last quarter of last year, according to the SRX, just shy of the $37,000 peak reached two years ago.
Property analysts said demand was being driven by those who are ineligible to buy new flats - despite a greater roll-out by the HDB - but have bigger budgets to pay for cash premiums. They include permanent residents (PRs) and singles.
Some HDB flat owners, while eligible to apply for new flats, may have been opting for resale units if they wanted to move into a new home quickly.
"Larger flats typically attract those with deeper pockets. If they are looking for space, units like executive flats, or even old five- roomers, will offer the best prices per sq ft," said Chesterton Suntec International's research head Colin Tan.
PropNex chief executive Mohamed Ismail said the price resilience of the HDB resale market is due to unabated demand and a tight supply.
According to the HDB, prices climbed 6.6 per cent for the whole of last year while the number of resale transactions went up marginally by 2 per cent from the preceding year.
Some 25,094 flats changed hands last year, compared to 32,257 units in 2010.
"HDB flats are viewed as a valuable asset by most owners, and they prefer to rent them out if they can, rather than sell them," said Mr Ismail.
The number of subletting approvals given by the HDB went up by 4 per cent last year, compared to two years ago.
Many owners, he added, had complained of difficulties in buying private property as prices have risen to record highs.
Said businessman William Ong, 43, who is asking for at least $55,000 in COV for his four-room Bishan home: "Why should I budge? If I move, or downsize, it should be made worth my while."
Earlier this month, the Government capped the debt servicing ratio for HDB flat buyers to 30 per cent of their monthly income, if they borrow from a bank, to prevent overstretching their finances. PRs will now have to pay a 5 per cent additional buyer's stamp duty on their first purchase.
"Cash premiums for larger flats might fall up to 20 per cent with the new measures but we are still seeing strong demand this year," said Mr Ismail.
SRX data shows that median COVs have remained fairly constant in the first three weeks of this year.
darylc@sph.com.sg
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