Will flat prices ever reCOVer?

SINGAPORE - Over the past year, she viewed more than 100 flats in Punggol before she found the perfect home.The spacious five-room flat was a steal because it was offered at $495,000, below valuation by a whopping $60,000.

On top of that, it is surrounded by sprawling greenery and is just minutes away from the Kallang-Paya Lebar Expressway.

The new owner of the flat, who wanted to be known as Ms A. Lee, is in her 50s and lives with her maid. She is single and her mother died 1½ years ago. She sealed the deal in December last year.

Ms Lee was adamant about living in Punggol because of her familiarity with the area. The general manager of an SME had moved from a four-room flat just a few blocks away.

She had wanted to move to a bigger home.

She declined to reveal the exact amount but said that her previous flat was sold for about $460,000 and $17,000 below valuation.

PropNex property agent Ray Sim, who helped to sell the flat to Ms Lee, admitted that he was shocked at the price of the flat.

UNUSUAL

Mr Sim said: "This transaction is unusual and definitely does not reflect the current market. Usually people sell their flats $20,000 or $30,000 below valuation at most."

He explained that the price dipped so drastically because the flat had been on the market for seven months.

At least 20 prospective buyers had seen the flat in the three weeks before it was sold to Ms Lee.

Mr Sim added that the seller wanted to move to Penang urgently and lowered the price to make the fourth-storey unit more attractive.

She had wanted to sell the nine-year-old unit at valuation - $555,000.

Ms Lee had been eager to buy the flat also because her workplace, a mall and many eateries are easy to reach from there.

The block also has a rooftop garden, barbecue pits and a multi-storey carpark which is linked to her level.

Although Ms Lee had to pay a bit more to upgrade from her old flat to her current one, she is pleased with her new home.

"I moved in just before Chinese New Year and invited my relatives over because my home is more spacious now. My colleagues hope to come over for a barbecue soon."

While Ms Lee's case is unusual, the cash-over-valuation (COV) has been on the decline in recent months.

Last month, median COV fell to $3,000 - its lowest since the 2009 financial crisis. Almost 30 per cent of HDB resale deals closed below valuation.

According to the Singapore Real Estate Exchange, Punggol was not the only HDB town that was hit by cases of negative COV.

Last month, a total of eight estates had a zero or negative median COV.

Property analyst Nicholas Mak said he expects median COV to remain between zero and $5,000 for the rest of the year. "Zero or low COV is a sign that the HDB resale prices are stabilising at a low rate of change.

"In 2014, HDB resale market participants need to get used to the new reality that low or zero COV will become increasingly common."

Wednesday, Feb 12, 2014

Linette Heng and Anne Hwarng

The New Paper

Source: AsiaOne

Cash premiums for resale HDB flats fall to eight-year low in January

SINGAPORE - Cash premiums for resale Housing Board flats continued to fall this year, with median cash-over-valuation (COV) dropping to $3,000 in January, according to Singapore Real Estate Exchange (SRX) flash figures on Thursday.

Here is the full SRX HDB Flash Report for January 2014:

HDB median COV dropped to $3,000. Overall HDB Cash-Over-Valuation (COV) in January 2014 dropped $2,000 from December 2013 to register a new low of $3,000 since October 2006. The median COV of $3,000 is on par with the previous low in June 2009 during the Global Financial Crisis.

Eight out of 28 HDB Towns saw zero or negative median COV. Sengkang and Punggol led the drop in COV with negative overall COVs recorded in Jan 2014. Bishan, Geylang, Jurong West, Sembawang, Woodlands and Yishun recorded zero overall median COV.

Almost three in ten HDB deals closed below valuation. According to transaction records from srx.com.sg agencies, 28.5 per cent of HDB resale deals were closed below valuation in January, an increase from the 20.4 per cent that closed below valuation in December. January's number is higher than the previous high of 26.0 per cent that closed below valuation in April 2009. Sengkang and Punggol saw more than half of their resale deals transacted below valuation.

HDB resale prices remained relatively flat. Overall, HDB resale prices gained a marginal 0.3 per cent in January, thwarting the general decline in monthly prices since April 2013.

Resale volume dropped 34.6 per cent y-o-y. According to flash estimates, 893 HDB flats were sold in January's resale market, a slight drop from December 2013's 910 units. On a year-on-year basis, January's resale volume posted a 34.6 per cent drop from 1,365 flats sold over the same month of last year.

Rental volume dropped 18.7 per cent y-o-y. An estimated 1,319 HDB flats were rented in January 2014, 6.8 per cent less than December 2013's 1,415 rental transactions. On a year-on-year basis, January's rental volume posted a 18.7 per cent drop from 1,623 flats leased over the same month of last year.

HDB median rents remained flat. HDB median rents stayed constant at $2,300 in January, after two consecutive monthly drops in November and December.

Thursday, Feb 06, 2014

Janice Heng

The Straits Times

Source: AsiaOne