Cov Premiums Fall Again

[neubie 2]

ST 07/12/2010

MORE signs have emerged that the property cooling measures introduced by the Government in August are having an impact on the market.

Home buyers are paying lower cash premiums for Housing Board resale flats, and fewer resale transactions are taking place now, according to National Development Minister Mah Bow Tan.

The median cash-over-valuation (COV) amount for HDB resale flats dipped to $22,000 last month, down from $25,000 in October, Mr Mah said in an interview with Channel NewsAsia.

This is the second month in a row that the median COV has slid. October's figure was itself a drop from the $30,000 median COV seen in the third quarter.

Resale transactions have also fallen by some 30 per cent so far in the fourth quarter as compared with the third quarter, Mr Mah was quoted as saying in the report, published on CNA's website on Monday.

He also said that the full impact of the cooling measures will only be felt in another one or two months.

[neubie 2]

Resale flat transactions and COVs fall: Mah Bow Tan

By Daryl Chin

MORE signs have emerged that the Government's cooling measures are having an impact on the property market.

Home buyers are paying lower cash premiums for Housing Board resale flats, and fewer resale transactions are taking place now, according to National Development Minister Mah Bow Tan.

The median cash-over-valuation (COV) amount for HDB resale flats dipped to $22,000 last month, down from $25,000 in October, Mr Mah said in an interview with Channel NewsAsia (CNA).

This is the second month in a row that the median COV has slid. October's figure was itself a drop from the $30,000 median COV seen in the third quarter.

Resale transactions have also fallen by some 30 per cent so far in the fourth quarter as compared with the third quarter, Mr Mah was quoted as saying in the report, which CNA broadcast yesterday.

He also said that the full impact of the measures would only be felt in another month or two, and though there is no need for further action now, the Government will take more steps if necessary.

High COV numbers, among other factors, led to cooling measures being introduced in August. These included restricting home buyers from owning both a private home and an HDB flat within a minimum occupancy period.

ERA Asia-Pacific associate director Eugene Lim said the measures 'effectively take out... private property owners from bumping up the COV prices'.

But he cautioned that COVs were only part of the whole story.

'Most deals are closed based on COVs rather than price, but I believe actual prices will still rise despite falling COVs, simply because valuation numbers are still going up.' Valuations are done by a panel assigned by HDB and are based on factors such as the price of past transactions.

He added: 'For example, a four-room flat in the Bedok area valued at $400,000 three months ago would be about $420,000 as of last month.'

Analysts The Straits Times spoke to said median COVs may fall even further.

SLP International Property Consultants' research executive director Nicholas Mak said: '$22,000 is still a bit high, it will likely fall further because of factors such as an increased housing supply.' HDB has said it will release 22,000 new flats next year, up from 16,000 this year.

In the CNA interview, Mr Mah said housing could be a key topic in the next general election: 'It's always been an issue at every election as far as I can remember. But this time round, it would probably be more than an issue.'

He also said he welcomes a contest from opposition parties in his Tampines GRC.

[Sam Lee Poh Huat 0]

I wonder who let it raise so much in the 1st place???

[fongfamily01 0]

COV drop? OR stabilised?

OR take a break?

Is transaction value going up? :dunno:

[pepamint_L 0]

Last week I went to view a 5 room flat in AMK, valuation 480K, seller still asking for 50K COV leh....I offered 32K,but was turned down..is COV really dropping? Not so much in 'hot' areas i think...

[Plastic3 0]

Last week I went to view a 5 room flat in AMK, valuation 480K, seller still asking for 50K COV leh....I offered 32K,but was turned down..is COV really dropping? Not so much in 'hot' areas i think...

Yup, only certain areas drop...

[therat 18]

I wonder who let it raise so much in the 1st place???

like hello kitty.

I saw you Q, I also want to Q

I saw you buy, I also want to buy

[forgotten 1]

like hello kitty.

I saw you Q, I also want to Q

I saw you buy, I also want to buy

LOL~ I didn't ask my bf to go queue hello kitty. Did u?

Edited December 12, 2010 by forgotten

[therat 18]

LOL~ I didn't ask my bf to go queue hello kitty. Did u?

I didn't.

I'm not crazy abt hello kitty but my MIL and SIL went to queue over-night for it. And my husband went there early morning to join their Q.

So many set of breakfast.. eat until I want to vomit.

[bepgof 20]

I didn't.

I'm not crazy abt hello kitty but my MIL and SIL went to queue over-night for it. And my husband went there early morning to join their Q.

So many set of breakfast.. eat until I want to vomit.

Huh, any of your bf, gf, ...quence to buy house?

Edited December 12, 2010 by bepgof

[MSlovers 0]

is there a need for cov in the 1st place?

[bepgof 20]

is there a need for cov in the 1st place?

This is a price structural issue. Selling price = valuation price + COV

Pte resale has only "selling price", no valuation report, hence no so-called "COV". Buyer has to agar agar if the "selling price" is close to prevailing mkt valuation price. Buyer needs to arrange with bank to evaluate the "valuation price" after he signs OTP......

Long long time ago, there were many "unregulated" "HDB vauation houses" who prepared "valuation report" to their likes for reasle HDB units. Timed bomb exploded, so now all valuation done by "regulated" valuators.

To make selling/buying easier and standardised, HDB sets rule that "valuation report" is a must for each buy/sell transaction and each report carries a 3-month validity. And the mortgage is based on the valuation price, not seller's selling price. However, always sellers find their house worth more than the valuation price & wanted to be sold only at a price higher than the valuation price. The difference of selling price & valuation price is hence called CASH OVER VALUATION.

You want HDB to reset the rule to follow pte resale's present practice? I tell you, many buyers "die".

Edited January 11, 2011 by bepgof

[samantha.lkh 0]

well say

[joyousonline 0]

dun think have dropped..but have risen...some owners of EM/EA wants to sell at 100k cov..this is ridiculous!!