Updated: 03/07/2014 02:51

HDB COV drops to zero

HDB COV drops to zero

The overall median cash-over-valuation or COV for HDB resale flats dropped to zero last month. 

The Singapore Real Estate Exchange, SRX, says it's the first time it's ever done so since 2006. 

The COV for January was $3,000. 

The SRX flash estimates showed that almost 4 in 10 HDB deals closed below valuation. 

That's a 7.9 percentage point increase from the 29.4 per cent of negative COVs in January. 

12 out of 26 HDB towns also saw zero or negative median COV. 

Resale volume also dropped. 

734 HDB flats were sold in February, down from 918 units in January. 

On a year-on-year basis, February's resale volume posted a smaller 6.3 per cent drop from 783 flats sold over the same month of last year. 

OrangeTee's Head of Research and Consultancy Christine Li says this trend could be due to the ramp-up in the supply of BTO flats from the government. 

So first-time buyers wouldn't be looking at resale flats. 

"There's really no urgency to go into the resale market right now because prices have more or less stabilised, or even declined since the beginning of last year. So I guess a lot of buyers are waiting at the sidelines for prices to drop further so it becomes more affordable."

Rental volume was also down. 

About 1,118 HDB flats were rented in February 2014. 

That's about 25 per cent less than January's 1,496 rental transactions. 

On a year-on-year basis, February's rental volume posted a 11.9 per cent drop from the 1,296 flats leased over the same month of last year.

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