The market for Housing and Development Board (HDB) resale flats continued to weaken last month, with median cash-over-valuations (COVs) falling to their lowest level in more than four years.
Median COVs fell 30.1 per cent to $8,000 in November, according to flash estimates from the Singapore Real Estate Exchange (SRX), from $11,444 the month before.
This is the first time that the cash premium fell below $10,000 since July 2009. COVs have consistently declined through 2013 from a peak of $35,000 in January.
“COV continued to fall and we are seeing more flats exchanging hands for zero COV or below valuation,” said Eugene Lim, key executive officer at ERA Realty.
Overall, on the month, SRX expects an estimated 1,051 resale flats to have been sold in November, down from the 1,187 units the month before.
SRX data showed that 97 resale flats sold last month were transacted below their valuation price, higher than the 82 units in October. Sengkang, Choa Chu Kang, and Jurong West had the most resale HDB flats sold below valuation in November.
The overall HDB resale price index in November dipped 0.6 per cent from October to 146.9 – the lowest level since last September.
Mr Lim attributed the weak performance overall to a tighter mortgage servicing ratio, as well as other policies such as allowing singles to buy Build-to-Order (BTO) flats, a three-year wait before new permanent residents can buy a resale flat and an increasing supply of new flats.
In the private residential sector, resale activity was lacklustre as well.
Resale prices for non-landed private residential units are estimated to have fallen 1.5 per cent from the previous month to 171.5 in November – which would make it the third straight month of decline.
“Prices have continued to soften and will continue to soften with all the property cooling measures snowballing and upcoming supply,” said Mr Lim.
All three regions saw price drops, led a by 2 per cent decline in the Core Central Region, followed by a 0.9 per cent dip for Outside Central Region and a 0.7 per cent loss in Rest of Central Region.
An estimated 387 non-landed homes were moved last month, 22.9 per cent lower than the 502 units in October.
Source: Business Times –6 December 2013
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