Seller's market in property sector leads to high COVs

National Development Minister Khaw Boon Wan said home buyers are currently paying above the value assessed by professional valuers as it's "a seller's market".

Minister Khaw was replying to a parliamentary query by MP for Tampines GRC, Baey Yam Keng, on the increasing cash-over-valuation figures:

"The basis of valuation is the same for all HDB flats whether they are resale flats transacted in the open market, flats affected by SERS, Selective Enbloc Redevelopment Scheme, or flats that are compulsorily acquired. Their values are assessed by a panel of professional valuers, based on established valuation principles. Taking into account factors such as location, size, storey height and the extent of renovations. Cash-over-Valuations or COVs, refer to the cash amounts which resale flat buyers pay above the market valuations to secure the purchase. HDB has always advised buyers to think carefully before committing to a price which is substantially above what the professional valuers have estimated. Resale prices are determined by willing buyers and sellers, the government cannot intervene to determine the transaction prices for buyers and sellers. We help players make informed decisions through timely release of pricing data via the HDB website."

Mr Khaw also said there's no need for the Housing and Development Board to start building executive maisonettes (EMs) again.

That's because executive condominiums (ECs) include duplexes for those looking for two-storey units similar to EMs.

He made this point in a written response to a question from MP for Pasir Ris-Punggol GRC Gan Thiam Poh.

HDB stopped building EMs in 1995, when the EC Housing Scheme was rolled out.

EMs range from 138 to 243 square metres in size while ECs range from 69 to 324 square metres.

Mr Khaw noted that ECs typically come with more unique design features than EMs.

He said that as the EC is bettter placed to meet the diverse needs of Singaporeans, there is no need to re-introduce EMs.