13-12-2012, 08:16 AM
People are willing to pay crazy amounts of cash for "premium" flats in "premium" locations.......
The Straits Times
www.straitstimes.com
Published on Dec 13, 2012
Cash premiums soar for Marine Parade resale flats
But COVs fall for HDB units in Bukit Panjang, Jurong West and Pasir Ris
By Rachel Chang
TO MRS Ng Siew Lay, 48, the $60,000 cash premium she paid to close the deal on her five-room Marine Parade flat a few weeks ago was "very reasonable".
This, despite the fact that the $825,000 flat is on a low floor and will require a $50,000 renovation job.
"It's near my son's school, near the city, near the good eateries, near the beach," said the stay-at-home mother of three.
"If only I had more cash, I would pay for a flat with a sea view."
House-hunters like Mrs Ng are why cash-over-valuation (COV) payments - what buyers pay above a flat's valuation to secure its purchase - have skyrocketed in Marine Parade in the last 12 months.
Data from the Singapore Real Estate Exchange (SRX) show that the median COV in the neighbourhood rose 47 per cent to $55,000 in the past year, the biggest jump islandwide.
Second place went to Bukit Merah, where median COV climbed 31 per cent to $42,000.
Agents said that Marine Parade has always been a top draw, thanks to nearby schools such as Tao Nan School, CHIJ Katong Convent and Ngee Ann Primary, and the scarcity of units for sale. It is a small estate of only 23,300 residents.
But in the past year, the high prices of private property in the area, which pushed buyers to the HDB resale market, and the news that the Eastern MRT line will run through Marine Parade, have stoked the COV fire, they said.
Among the top five Housing Board towns where COVs climbed the most, the stand-out to market-watchers was Punggol, in fourth place: Median COV there rose 27 per cent to $43,000.
Unlike the rest, Punggol is a new town with fewer amenities. Plus, there has been a deluge of new build-to-order flat launches there. An abundant supply of new flats in an area usually takes the wind from its resale market.
"The Government's marketing effort has succeeded," explained Propnex Realty group division director Bobby Ho. "Its promotion of waterfront living creates this impression that Punggol is the town of the future."
One factor the top-performing towns have in common is the high prices of executive condominium and private property launches in their vicinity.
This pushes buyers who want to live in a certain neighbourhood to HDB flats nearby, said Mr Donald Yeo, head of support and services at HSR International.
These catapulting COVs have contributed to nationwide cash premiums reaching a median of $34,000 in the fourth quarter so far, just $2,000 shy of a five-year historic high, said SRX last week.
But, as its data revealed, COVs are not rising across the board: 11 towns out of 26 overall have seen drops in the past year.
Median COV in Bukit Panjang fell 12 per cent to $29,000, while in Jurong West, it dropped 9 per cent to $30,000.
Bukit Panjang is handicapped by its lack of connectivity through a poorly regarded LRT network, noted C&H Properties key executive officer Albert Lu.
Jurong West flats should command more in cash premiums as they are popular with foreigners as they are near factories in Tuas, he said. He added that about half of the blocks there have reached their quota of permanent residents allowed, tamping down demand from this group of buyers.
Some neighbourhoods in the bottom five, like Pasir Ris, noted SLP International head of research Nicholas Mak, have seen COVs fall because they already breached high levels. Median COV in Pasir Ris dropped 4 per cent, but still came in at $42,000.
As for whether COVs will reverse their upward trend nationwide or in the most popular towns, Mr Mak said: "It's a vicious circle. People ask for a high COV because they know that to buy their next flat, they have to pay a high COV as well."
rchang@sph.com.sg
The Straits Times
www.straitstimes.com
Published on Dec 13, 2012
Cash premiums soar for Marine Parade resale flats
But COVs fall for HDB units in Bukit Panjang, Jurong West and Pasir Ris
By Rachel Chang
TO MRS Ng Siew Lay, 48, the $60,000 cash premium she paid to close the deal on her five-room Marine Parade flat a few weeks ago was "very reasonable".
This, despite the fact that the $825,000 flat is on a low floor and will require a $50,000 renovation job.
"It's near my son's school, near the city, near the good eateries, near the beach," said the stay-at-home mother of three.
"If only I had more cash, I would pay for a flat with a sea view."
House-hunters like Mrs Ng are why cash-over-valuation (COV) payments - what buyers pay above a flat's valuation to secure its purchase - have skyrocketed in Marine Parade in the last 12 months.
Data from the Singapore Real Estate Exchange (SRX) show that the median COV in the neighbourhood rose 47 per cent to $55,000 in the past year, the biggest jump islandwide.
Second place went to Bukit Merah, where median COV climbed 31 per cent to $42,000.
Agents said that Marine Parade has always been a top draw, thanks to nearby schools such as Tao Nan School, CHIJ Katong Convent and Ngee Ann Primary, and the scarcity of units for sale. It is a small estate of only 23,300 residents.
But in the past year, the high prices of private property in the area, which pushed buyers to the HDB resale market, and the news that the Eastern MRT line will run through Marine Parade, have stoked the COV fire, they said.
Among the top five Housing Board towns where COVs climbed the most, the stand-out to market-watchers was Punggol, in fourth place: Median COV there rose 27 per cent to $43,000.
Unlike the rest, Punggol is a new town with fewer amenities. Plus, there has been a deluge of new build-to-order flat launches there. An abundant supply of new flats in an area usually takes the wind from its resale market.
"The Government's marketing effort has succeeded," explained Propnex Realty group division director Bobby Ho. "Its promotion of waterfront living creates this impression that Punggol is the town of the future."
One factor the top-performing towns have in common is the high prices of executive condominium and private property launches in their vicinity.
This pushes buyers who want to live in a certain neighbourhood to HDB flats nearby, said Mr Donald Yeo, head of support and services at HSR International.
These catapulting COVs have contributed to nationwide cash premiums reaching a median of $34,000 in the fourth quarter so far, just $2,000 shy of a five-year historic high, said SRX last week.
But, as its data revealed, COVs are not rising across the board: 11 towns out of 26 overall have seen drops in the past year.
Median COV in Bukit Panjang fell 12 per cent to $29,000, while in Jurong West, it dropped 9 per cent to $30,000.
Bukit Panjang is handicapped by its lack of connectivity through a poorly regarded LRT network, noted C&H Properties key executive officer Albert Lu.
Jurong West flats should command more in cash premiums as they are popular with foreigners as they are near factories in Tuas, he said. He added that about half of the blocks there have reached their quota of permanent residents allowed, tamping down demand from this group of buyers.
Some neighbourhoods in the bottom five, like Pasir Ris, noted SLP International head of research Nicholas Mak, have seen COVs fall because they already breached high levels. Median COV in Pasir Ris dropped 4 per cent, but still came in at $42,000.
As for whether COVs will reverse their upward trend nationwide or in the most popular towns, Mr Mak said: "It's a vicious circle. People ask for a high COV because they know that to buy their next flat, they have to pay a high COV as well."
rchang@sph.com.sg