Median COV for flats drops to $8,000

[Cecil Lee]

Comment: Looks like the "nightmare" has began for those who are considering or trying to sell their existing 99 leasehold flat.
For those who bought theirs on the resale market especially in the last two years would realise that some may have already started to make a paper-loss; depending on location, view and level.
Median COV for flats drops to $8,000
The Straits Times 6 December 2013
By JANICE HENG
CASH premiums for HousingBoard flats have fallen furtherand faster than expected as housing curbs continue to bite.The median cash-over-valuation (COV) dropped to $8,000last month from $11,444 in October, ahead of predictions that itwould hit $10,000 by the yearend, according to Singapore RealEstate Exchange (SRX) flash estimates yesterday.
This might be due to moredeals in less popular estates,rather than unexpectedly cooldemand overall, said analysts."A lot of transactions were inplaces like Sengkang and JurongWest, where COVs are lower,"said ERA Realty key executiveofficer Eugene Lim.
The fall was part of a weakhousing market picture. Both public and private resale prices fell to
the lowest levels this year. Transaction volumes dipped, reversinga slight rise in September.
Resale prices of non-landedprivate homes fell 1.5 per centfrom October.
There were 387 non-landedhomes resold last month, downfrom both October and the same
time last year.In public housing, the fall inmedian COV marked the firsttime since July 2009 that cashpremiums fell below $10,000.Analysts say it could slip to$5,000 in the next few months,
on the back of more negativeCOV deals.
Last month, 13.1 per cent of resale deals closed below valuation,up from the SRX's estimate of 8.5per cent in October."We are expecting COV tocontinue to moderate, especiallyduring the festive period," saidMr Lim. But he does not expect itto hit zero, as flats in mature estates are still fetching reasonablepremiums.
R'ST Research director OngKah Seng expects COVs to continue to dip until around the second
quarter or middle of next year.With more suburban condominiums being completed nextyear, "there is probably morecompetition by HDB upgraders tosell their flats from now (onwards)" , he said.Amid a buyer's market, HDB10resale prices fell 0.6 per cent tothe lowest level since Septemberlast year, and fewer flats changedhands. The estimated 1,051 transactions last month was downfrom October and 34 per centless than the same time last year,Though resale numbers are usually down in the festive season, analysts said last month'sfall was due more to cooler buyersentiment after loan curbs.Completing the picture ofweak demand was the rental market. Private non-landed rentalprices remained flat, after threemonths of decline.
For HDB flats, median rentsslipped 1.1 per cent to $1,130, thefirst drop since they reached
$1,400 in June last year.