More flats sold below valuation even as COVs fell further
Cash premiums for resale flats fell below $10,000 last month for the first time in more than three years.
According to flash estimates compiled by the Singapore Real Estate Exchange, the cash-over-valuation or COV for HDB resale flats reached $8,000 last month.
Meanwhile, 13.1 per cent of HDB resale deals closed below valuation last month, up from October's 8.5 per cent.
Sengkang, Choa Chu Kang, and Jurong West saw the most numbers of negative COV deals in that month.
Property analysts 938LIVE spoke to expect the Cash-Over-Valuation to continue to fall for at least the next 2 to 3 years.
Since the property cooling measures were announced in August, some 20 per cent of resale flats were transacted at either zero COV or below valuation.
While they measures have proven to be effective in cooling the market, there are other factors.
OrangeTee's Research Head, Christine Li, says one of them is the imminent completion of several private housing and Executive Condominiums projects.
"Going forward, we are going to see a lot more supply, by the time you collect your key, you have to dispose your HDB flats, going to see a lot second timers having to sell HDB flats, ability to ask for high COV is very much limited."
PropNex's Chief Executive Officer, Mohamed Ismail says it's now a buyer's market.
"Today, people can pick up a resale property, in some of the newer estate in Sengkang and Ponggol, buying it below value of 20 or 30 thousand dollars, this was unheard of. Mainly because there's more supply, and less demand."
ERA's Key Executive Officer, Eugene Lim while the COV is expected to fall further, it's unlikely that it will hit zero.
-By Lee Gim Siong
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