SINGAPORE: The median cash-over-valuation (COV) for Housing and Development Board (HDB) resale flats fell to S$3,000 in January, matching the previous low in June 2009 during the global financial crisis.
Analysts Channel NewsAsia spoke to expect the COV to fall further, with 24,300 Build-to-Order (BTO) flats slated to be launched this year.
According to data from the Singapore Real Estate Exchange (SRX), the median COV sank to S$3,000 last month from S$5,000 in December.
In January, 893 HDB resale flats were sold -- a slight drop from the 910 units sold in December.
On a year-on-year basis, January's resale volume was a 34.6 per cent drop.
PropNex CEO Mohd Ismail attributed the HDB resale market condition in January to "various cooling measures put in place working at their best."
He noted the measures include the ruling that a permanent resident who intends to buy a resale flat has to wait for at least three years.
"And the mortgage servicing ratio has been reduced to 30 per cent. That has a big impact. A lot of Singaporeans who want to enter and buy a resale property, which has already gone up in prices, find it a big challenge to enter the market," he added.
Real Centre Properties’ executive director Thomas Tan said: "BTO launches, the huge supply that the government has released, this will tell you that the government is telling first-timers, 'if you are a first-timer, please buy HDB flats instead of from the resale market'. And this has taken quite a fair bit of demand, especially from the first-timers in the resale market."
Several HDB towns saw zero or negative median COV.
Punggol led the drop with almost 70 per cent of transactions in the area seeing negative COVs.
This is followed closely by Sengkang and Jurong West.
And island-wide, almost three in 10 HDB deals closed below valuation.
But resale prices gained a marginal 0.3 per cent in January, going against the general decline in monthly prices since April 2013.
Some analysts attributed this to sales of niche units and penthouses.
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