07-09-2013, 10:54 AM
http://www.todayonline.com/business/covs...-valuation
SINGAPORE — Cash-over-valuations (COVs) continued their downward spiral last month, falling to their lowest level in over four years as government measures to take the heat out of the property market continued to be felt in the Housing and Development Board (HDB) resale segment.
The overall median COV dipped another S$2,000 from July to S$18,000 last month, the lowest level since July 2009 when the median was S$10,000, according to the Residential Property Flash Report issued by the Singapore Real Estate Exchange (SRX).
And more resale properties are changing hands with no COV at all: There were 56 zero-COV transactions last month, up from fewer than 20 in each of the first four months of the year, the SRX noted.
“More and more larger flats, five-room and executives, in non-mature estates are being transacted at valuation or below valuation. Sellers of three- or four-room flats with not so prime attributes are also worried that if they do not lock in their buyers now, the COV will dip some more,” said ERA Realty Network Key Executive Officer Eugene Lim.
“The mood among sellers is that they are generally more accommodating,” he said.
COVs have been trending downwards as the comprehensive round of property cooling measures introduced in January started taking effect.
And analysts predict the trend is likely to continue as initiatives announced late last month to address concerns about the affordability of HDB flats also start to kick in.
Savills Senior Director of Research and Consultancy Alan Cheong is forecasting that median COVs could touch the S$10,000-mark by the end of this year.
“There is some pressure on COVs because demand from permanent residents, who can’t buy resale flats in the first three years of gaining their status, is expected to drop. And some flat owners looking to upgrade are now willing to let go of their flats at lower COVs,” he said.
The median resale price of previously-owned flats fell 0.7 per cent to S$458,000 last month, a fourth consecutive month of decline, SRX data showed.
Meanwhile, resale prices of non-landed private residences inched up 1.5 per cent last month to reach a new high, as the property cooling measures saw buyers gravitate towards smaller flats, which have a lower overall price, but higher per square foot (psf) quantum. This comes on the heels of July’s 0.5 per cent drop in the Private Residential Resale Index, which uses psf data as one of the key pieces of information to calculate the price movement.
Based on ERA’s transactions, about 10 per cent of resale transactions in July were in the range of S$800,000 to S$1 million. Last month, transactions in this range rose to 15 per cent, Mr Lim said.
“Units in this price range are typically small units below 900 sq ft. Though their quantum is small, the price per square foot is higher as compared to a larger unit,” he said.
According to flash estimates, 1,280 HDB flats were sold in the resale market last month, similar to the volume in July. Year-on-year, last month’s resale volume dropped 29 per cent, compared to the same period last year.
View: Time to buy?
SINGAPORE — Cash-over-valuations (COVs) continued their downward spiral last month, falling to their lowest level in over four years as government measures to take the heat out of the property market continued to be felt in the Housing and Development Board (HDB) resale segment.
The overall median COV dipped another S$2,000 from July to S$18,000 last month, the lowest level since July 2009 when the median was S$10,000, according to the Residential Property Flash Report issued by the Singapore Real Estate Exchange (SRX).
And more resale properties are changing hands with no COV at all: There were 56 zero-COV transactions last month, up from fewer than 20 in each of the first four months of the year, the SRX noted.
“More and more larger flats, five-room and executives, in non-mature estates are being transacted at valuation or below valuation. Sellers of three- or four-room flats with not so prime attributes are also worried that if they do not lock in their buyers now, the COV will dip some more,” said ERA Realty Network Key Executive Officer Eugene Lim.
“The mood among sellers is that they are generally more accommodating,” he said.
COVs have been trending downwards as the comprehensive round of property cooling measures introduced in January started taking effect.
And analysts predict the trend is likely to continue as initiatives announced late last month to address concerns about the affordability of HDB flats also start to kick in.
Savills Senior Director of Research and Consultancy Alan Cheong is forecasting that median COVs could touch the S$10,000-mark by the end of this year.
“There is some pressure on COVs because demand from permanent residents, who can’t buy resale flats in the first three years of gaining their status, is expected to drop. And some flat owners looking to upgrade are now willing to let go of their flats at lower COVs,” he said.
The median resale price of previously-owned flats fell 0.7 per cent to S$458,000 last month, a fourth consecutive month of decline, SRX data showed.
Meanwhile, resale prices of non-landed private residences inched up 1.5 per cent last month to reach a new high, as the property cooling measures saw buyers gravitate towards smaller flats, which have a lower overall price, but higher per square foot (psf) quantum. This comes on the heels of July’s 0.5 per cent drop in the Private Residential Resale Index, which uses psf data as one of the key pieces of information to calculate the price movement.
Based on ERA’s transactions, about 10 per cent of resale transactions in July were in the range of S$800,000 to S$1 million. Last month, transactions in this range rose to 15 per cent, Mr Lim said.
“Units in this price range are typically small units below 900 sq ft. Though their quantum is small, the price per square foot is higher as compared to a larger unit,” he said.
According to flash estimates, 1,280 HDB flats were sold in the resale market last month, similar to the volume in July. Year-on-year, last month’s resale volume dropped 29 per cent, compared to the same period last year.
View: Time to buy?
