COV falls to lowest in about a year

The overall cash premium or Cash-Over-Valuation (COV) for HDB resale flats has fallen to its lowest in about a year.

This is according to flash estimates by the Singapore Real Estate Exchange (SRX).

The overall median COV fell by 15.2 per cent in the second quarter of the year to S$28,000, down from S$33,000 in the first quarter.

The previous low was S$26,000 in the second quarter of 2012.

Meanwhile HDB resale transactions fell by 31 per cent in the first half of this year compared with the same period in 2012.

A total of 7,555 flats were transacted in the first half of 2013.

ERA Realty Network’s key executive officer, Eugene Lim, said: “The June COV was $24,000. It has trended downwards. We are likely to see COV continue to trend downwards and quite possibly by the last quarter, we could see COVs around the $20,000 region.

“When it hits the $20,000 region, I think we may see more buyers entering the market, because it’s a figure that’s generally acceptable to buyers.

“(So we could have more buyers entering the market) instead of them wanting to wait three years for a HDB BTO (flat).”

On the private housing front, transactions for non-landed private resale units fell by 42 per cent in the second quarter, compared with the same period one year ago.

But the 2,024 units moved in the second quarter of this year were slightly higher than in the first quarter.

In the month of June, resale prices of non-landed private residential units showed an overall increase of 1.8 per cent, according to flash SRX estimates.

Source – CNA – 5 Jul 2013

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