Recent property cooling measures have taken a bite out of cash premiums for Housing Board flats, pushing them to the lowest level in nearly a year.
The overall median cash paid above a flat’s valuation (COV) has gone down from $35,000 in January to $27,000 in the first three weeks of May, according to preliminary data from the Singapore Real Estate Exchange (SRX).
This is the lowest figure since June last year, when the median premium was $26,000.
Although COVs have dropped across the board, premiums for large executive flats slipped the most – from $55,000 in January to $45,000 this month.
Property analysts attribute the slowdown to the cooling measures that the Government introduced in January.
The measures include capping mortgages at 30 per cent of a buyer’s monthly household income.
This limits how much a buyer can borrow to fund a home purchase. Previously, there was no cap.
Permanent residents, who can buy only flats from the HDB resale market, also have to fork out a 5 per cent duty on their first residential purchase. There was previously no duty for PRs, who make up a fifth of public home buyers.
According to data from HDB, 4,335 flats changed hands in the first quarter of this year, a new low since 1997.
Usually, the number of transactions in the first quarter averages 8,000.
National Development Minister Khaw Boon Wan said in March that he plans to offer cheaper new flats in non-mature estates, although details are not yet known.
Despite the fall in cash premiums however, median prices of flats are still on the rise, according to the latest flash report from SRX, which collates data from major property firms here.
Prices rose from $460,000 in January to $465,000 last month.
Source: The Straits Times –25 May 2013
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