Zero COV transactions on the rise: SRX

[princess_morbucks]

http://www.channelnewsasia.com/news/...medium=twitter

SINGAPORE: The number of resale flats that have been sold without a cash premium (cash-over-valuation or COV) in July and August has exceeded the numbers seen in the first and second quarters of 2013.

According to the Singapore Real Estate Exchange (SRX), there were 111 zero COV transactions in the third quarter, excluding September -- that is almost triple the number seen in the first quarter of this year (38 zero COV transactions). There were 77 of such transactions in the second quarter.

SRX data also showed that four-room resale flats saw the most number of zero COV transactions from January to August out of all the flat types -- with 82 cases recorded. There were 67 three-room flats and 57 five-room units transacted at zero COV during the same period.

Property analysts said the increase is a sign that measures like the total debt servicing ratio are taking effect.

While SRX did not reveal the number of resale flats sold below valuation, some property analysts expect there to be more of such cases in at least the next two quarters.

Ku Swee Yong, CEO of International Property Advisor, said: "We'll definitely see in the next two quarters at least, more and more cases of negative COVs. And when negative COV transaction data adds up, then the authorities will be adjusting the value, and so valuations will start to go down.

"When valuations start to go down, then Cash-Over-Valuations being negative will actually be reduced. So 12 months from today, I believe overall market COV may turn out to be plus minus zero, but with the value trending down by five to 10 per cent."

- CNA/ac

[star]

Delink between condo and hdb has started. Next year condo and hdb will be wider apart. Yishun central condo will launch at $1800psf while hdb price will go south slightly.

[newbie11]

Confused.. Why would it widen

[mummy]

Delink between condo and hdb has started. Next year condo and hdb will be wider apart. Yishun central condo will launch at $1800psf while hdb price will go south slightly.

But what about the TDSR effect, seeing fewer people at show flats recently. But I do hope condo prices go up as am vested in a mm unit at city fringe.

[star]

Those that bought ec need to sell their hdb in 6 month time after TOP. They will dump hdb at whatever price quoted.

[star]

New PR unable to buy resale hdb, they only able to do so after 3years. New EC owners are sweating, they hope to sell hdb as soon as possible even at less than valuation and without cov.

[ClemenceLY]

Those that bought ec need to sell their hdb in 6 month time after TOP. They will dump hdb at whatever price quoted.

Not only for those bought EC, it would also probably affect those upgraders from HBD to Condo... And it is depressing to dump their HDB at low price due to gov policy...

Is this gov intent to lower HDB resale value ? if yes, then gov is hurting this group of upgraders...

And i don't think the gap between the condo and HBD could widen too much... Nowadays a lot of condo are surrounded by HDB. The condo branding and facilities are unlikely able to command too high of a premium....

[star]

Not only for those bought EC, it would also probably affect those upgraders from HBD to Condo... And it is depressing to dump their HDB at low price due to gov policy...

Is this gov intent to lower HDB resale value ? if yes, then gov is hurting this group of upgraders...

And i don't think the gap between the condo and HBD could widen too much... Nowadays a lot of condo are surrounded by HDB. The condo branding and facilities are unlikely able to command too high of a premium....

Bro, the difference are new pr can buy condo not hdb and hdb can only loan for 25yrs and can only use 30% of salary to service loan. U can loan more when buying condo than hdb.

Since alot of complainers saying hdb flat price too high during national conversation and hong lim park protest and they wanted hdb price to come down.

[henryhk]

Bro, the difference are new pr can buy condo not hdb and hdb can only loan for 25yrs and can only use 30% of salary to service loan. U can loan more when buying condo than hdb.

Since alot of complainers saying hdb flat price too high during national conversation and hong lim park protest and they wanted hdb price to come down.

Serve tose right who complain non-stop tat hdb price is too high, I not surprise it will drop by more than 100k in the next few years....tose honest dwellers will suffer, while people who are cash rich and hold many properties won't worry much!

[Rockstone]

Too high price complain.. too low also complain. May be free housing ...

[CondoInterested]

Not very familiar with other areas of HDB, but HDB at Clementi seems to be holding quite well whereas place like Sembawang seems to be have lost steam and going back to some 1 to 2 years ago price, better grab now...

[august]

Serve tose right who complain non-stop tat hdb price is too high, I not surprise it will drop by more than 100k in the next few years....tose honest dwellers will suffer, while people who are cash rich and hold many properties won't worry much!

by hdb honest dwellers u mean those that do not have private pty? how would they suffer since they are not buying or selling whether their hdb value rise or drop?

[thomastansb]

They won't be hurt. It is a dream come true for them. They wanted lower hdb prices isn't it? They keep complaining 1 million dollars hdb so now hdb prices going down, everyone should be happy.

Not only for those bought EC, it would also probably affect those upgraders from HBD to Condo... And it is depressing to dump their HDB at low price due to gov policy...

Is this gov intent to lower HDB resale value ? if yes, then gov is hurting this group of upgraders...

And i don't think the gap between the condo and HBD could widen too much... Nowadays a lot of condo are surrounded by HDB. The condo branding and facilities are unlikely able to command too high of a premium....

[thomastansb]

Grab now? Tomorrow, you can buy a Toa payoh flat at today's sambawang price.

Easily 150,000 HDB units to hit MOP by 2020.

Not very familiar with other areas of HDB, but HDB at Clementi seems to be holding quite well whereas place like Sembawang seems to be have lost steam and going back to some 1 to 2 years ago price, better grab now...

[mermaid]

gd news towards a "crash" in pte ppty

low/no cov will soon (1/2 yr at least) translate into a lower valuation!

with TDSR n lower resale value in HDB, it will be harder for hdb owners to upgrade to condos.

demand for condo will drop which add pressure to the prices. MTBs/wanna more boats, get ready to show hand

[mermaid]

They won't be hurt. It is a dream come true for them. They wanted lower hdb prices isn't it? They keep complaining 1 million dollars hdb so now hdb prices going down, everyone should be happy.

there is a reason why some ppl r forever stuck wif HDBs

[thomastansb]

HDB is not a bad thing. The value for HDB should remains affordable. People shouldn't dream of selling it for profit. If you buy at 250k, you should sell around 270k.

there is a reason why some ppl r forever stuck wif HDBs

[mermaid]

HDB is not a bad thing. The value for HDB should remains affordable. People shouldn't dream of selling it for profit. If you buy at 250k, you should sell around 270k.

selling at 20k higher is making a big loss ...

[eng81157]

They won't be hurt. It is a dream come true for them. They wanted lower hdb prices isn't it? They keep complaining 1 million dollars hdb so now hdb prices going down, everyone should be happy.

only COV went down, but valuation still remains. all you need is a couple of jokers who say "i don't want to pay COV but you can put the sum into the unit's transacted price" - tada, price valuation still goes up without any COV increase.

[thomastansb]

You can't put the cov into the loan. The valuation is fixed. So your loan is fixed as well.

only COV went down, but valuation still remains. all you need is a couple of jokers who say "i don't want to pay COV but you can put the sum into the unit's transacted price" - tada, price valuation still goes up without any COV increase.

[Violinbite]

Previously sometime ago, in Zao An Ning Hao news program, I too mentioned about delink prices of condo from HDB flats, but the property analyst said it cant be done as there are upgraders from HDB to condo who will need to sell their flats before the upgrade. Perhaps its not so much of direct delinking but inter-link.

Could it be something like:- new BTO compared (linked so to speak) to resale HDB; Resale HDB to larger size - near MRT resale flats; resale flats to EC (need to dispose flat); EC upgraders to private condos (disposal needed); HDB owners buying condos (no disposal needed); Condos owners upgrade to landed property (disposal needed); EC owners buying extra condos. Condos owner buying extra condos; Landed owners buying condos.

I think generally the rich usually won't anyhow sell their prop away if they have holding power, the poorer group need cash will sell at depressive prices if needed so to speak. On the average time, if one have landed, a condo and HDB. They need to dispose one, unlikely it wil be the landed. Thus I think, the delinking is a bit like landed pricing, from HDB. The gaps are wider by quantum. (Maybe HDB $100K for 5rm, condo 3bedder around $350k and landed $800k - now like $400k HDB 5rm; $1.1mil condo 3bedder and $2.5-3mil for landed).

I see the link but also the delinking so to speak..

[lionhill]

If the HDB price really drops, those with PCs should start to worry. The gap between the prices of HDB and PCs have been too wide (to me, the norm should be 2, but now the price of PC is more than double of that of HDB).

With such a big gap, i will never think of selling my HDB even if I need to pay ABSD.

If PM Lee's example in the National Day rally is true, HDB in pre-mature areas are now a bargain.

[henryhk]

by hdb honest dwellers u mean those that do not have private pty? how would they suffer since they are not buying or selling whether their hdb value rise or drop?

Cannot like tat say, ....why do people still buy hdb hoping tat the value can rise rather than buy a hdb tat the value may not rise..... Knowing tat for sure they won't buy pte property in the future...... Hdb is an asset...who want a decreasing value asset, like a car!

[VS]

HDB is not a bad thing. The value for HDB should remains affordable. People shouldn't dream of selling it for profit. If you buy at 250k, you should sell around 270k.

you tell that to those who bought Pinnacle, their MP told them don't sell, their hdb value will go up.

[Violinbite]

If PM Lee's example in the National Day rally is true, HDB in pre-mature areas are now a bargain.

The govt words in some sense will always stand but it is very relative. Will one say it is great bargain if someone can find a freehold 2 bedder apartment in Orchard Rd for $700k? I would think investor will think so but for those primary need is to provide home for a family of 5, they might not even care but go get a HDB instead.
Govt say pre-mature HDB a bargain is certain, like the new 2 rm BTO at $80-100k. In speaking, if you manage to ballot and got it, it is certainly a bargain, if you don't want it, many others behind you certainly wants it badly. It is very 'liquid' asset since the lower income and the higher income group will see it as cheap so to speak. But when come to selling it (lets cast aside MOP factor), if one got it for $80k, do you think a lower income will really want to pay double on the spot from you? That can be a question mark, since to pay double it may not be a bargain anymore.

[Violinbite]

Cannot like tat say, ....why do people still buy hdb hoping tat the value can rise rather than buy a hdb tat the value may not rise..... Knowing tat for sure they won't buy pte property in the future...... Hdb is an asset...who want a decreasing value asset, like a car!

No ones want a depreciating asset certainly. But the sad truth is given a lease of 99 years, the older flats are bound to depreciate, but govt will smartly enbloc the very old units by package something newer to reduce the impact of depreciation for the owners. Those who pay at nose high prices (like $1mil EM) that is 30 years old, I m not sure if these can appreciate any further... if they buy for multi-generation home stay, hopefully they don't bother so much.