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18 Dec

Marine Parade HDB flats – Highest COV

In the wake of news that resale HDB flats COV are rising and rising, and rising, data from the Singapore Real Estate Exchange (SRX) now shows that the estate with the highest COV prices is Marine Parade. No surprises there since it’s always been a hotspot for home buyers, being so close to town yet far enough to feel the sea breeze, with good schools nearby and so much good food and a shopping mall and town centre to boot. What’s not to love?

How much higher have prices of resale flats in areas such as Marine Parade gone?

How much higher have prices of resale flats in areas such as Marine Parade gone?

And loving it they certainly are. Property agents say that Marine Parade have always been a good spot for sales of properties, both private and HDB flats. Now with news that the Eastern MRT line will run through Marine parade, COV prices for resale HDB flats here have almost doubled, with a 47 per cent rise to $55, 000. That also pushes the sale prices up and it’s no wonder home prices only seem to go up. The lack of new BTO flats and the limited number of HDB flats in the area, 23, 000, also means that limited supply of resale flats here outweighs strong demand.

SLP International head of research, Nicholas Mak, has an interesting comment, “It’s a vicious circle. People ask for a high COV because they know that to buy their next flat, they have to pay a high COV as well.”  Across the board, the median COV is now $34, 000. In Punggol, which is at the forefront of the Waterfront Living lifestyle, COV prices have risen 27 per cent to $43, 000. 11 out of the 26 HDB estates in Singapore have seen a drop in COV prices however, notably in Bukit Panjang, Jurong West and Pasir Ris.

13 Nov

HDB Resale flats – COV up

Are more HDB flat owners hoping to get more out of their flats as the property market heats up once more? It may seem that way as COV prices on again on the rise. Up $3000 from $30,000 in Q3, COV prices in Q4 prove to be climbing, according to data from the Singapore Real Estate Exchange (SRX).

Tampines HDBThe decreasing number of resale HDB flats in the market could be reason for this rise since rarity is often equated to rising prices. And the reason for few HDB Resale flats could be due to the rising prices in the private residential property market. This means more HDB upgraders may rethink their decision to sell, or if they do, they may put a higher price tag on their existing HDB home.

Although HDB has built a record 27, 000 Buid-To-Order (BTO) flats this year alone, the supply is still insufficient to meet the demands of second-time applicants, which also means they have to turn to the resale HDB flat market, where competition is already high especially with permanent residents and singles in the same buyers pool.

Perhaps the effects of the new BTO flats have yet to sink in but industry experts are expecting it to take effect when the BTO flats are ready for occupation.

11 Oct

7 “Uniquely Singapore” Acronyms Every Property Investor Should Know

Singapore has been called the “Land of Acronyms”, and with good reason – abbreviations are used widely by locals to refer to highways and buildings, government agencies, financial institutions, political parties … and more.  It should come as no surprise that the local property industry also has its fair share. Here are some of the most commonly used real estate acronyms and abbreviations in Singapore:

1) HDB (Housing Development Board)

While many countries in the world have some form of public housing, Singapore is unique in that about 80% of Singaporeans stay in an HDB flat, giving it the distinction of having one of the highest percentages (if not the highest) of residents in public housing in the world. With the rapidly rising population and land scarcity, the time when an HDB flat hits the S$1 million mark may not be very far away.

2) TOP (Temporary Occupation Permit)

In layman terms, TOP refers to the time when construction is completed and a property is ready to be occupied. The Building Authority would also have issued a Certificate of Statutory Completion (CSC) at this time.

3) COV (Cash Over Valuation)

Most commonly used since the rapid increase of HDB prices since 2007, COV refers to the sum above and beyond what the flat is valued at. COVs have been known to reach highs of more than S$50,000 in recent years. Read the amount in COV that most Singaporeans are willing to pay up to here.

4) LTV (Loan to Value)

LTV refers to the maximum amount a bank will lend for the financing of a property purchase. Hence, for a S$1 million property, a LTV of 80% means that the bank will lend a maximum of S$800,000. More recently, a series of cooling measures introduced by the local authorities to discourage speculation have included the lowering of LTV for second mortgages to 60% from 70% previously.

5) SSD (Standard Stamp Duty)

SSD is imposed by IRAS (Internal Revenue Authority Singapore) on both buyers and sellers of property, and is calculated according to the amount of the property purchase value. For buyers, SSD is calculated according to a “tier” system, with 1% imposed on the first S$180,000, 2% on the next S$180,000, and 3% thereafter. The recent cooling measures have also included new SSD rates ranging from 4% to 6% for residential properties disposed of within 4 years of acquisition.

6) VTO (View To Offer)

VTO is commonly used in open listings, and can sometimes mean that the owner is “testing the waters” by not indicating an asking price in order to see what offers his property can attract. In some instances, a VTO listing may mean that the flat may not have had its valuation exercise completed.

7) Co-Broke

As both the buyer and seller may have agents on each end, a co-broke refers to the agreement where agents on both side agree to share exclusive listings with one another, with a 50-50 split of commission. However, the co-broke system is sometimes abused, in cases where agents may not reveal higher offers or encourage a client to buy a more expensive flat in order to maximize his commission.

25 Aug

Top 10 Housing Estates with the highest and lowest COV for the first half of 2011

Following up to iProperty.com.sg’s coverage on National Development Minister Khaw Boon Wan’s comment that Cash Over Valuation (COV) cannot be abolished, here are the ten estates with the highest and lowest median COVs for the first half of 2011.

Top 5 Estates with the Highest COV

Top 5 Estates with the Highest COV (StreetSine's Property Analytics)

Top 5 Estates with the Highest COV (StreetSine's Property Analytics)

Bukit Timah comes in first place with a staggering $43,000 median COV. The consistently expensive district has brought in about $13,500 higher than the second highest estate in Singapore, Bishan.

The high median COV of Bukit Timah is hardly surprising, and there may be a few contributing factors. One of which is this characteristic of the district, which has a population of mostly well-heeled residents and a low number of HDB flats. Another possible reason could be the construction of Circle Line MRT stations – in particular, Farrer Road and Botanic Gardens stations. The high price could be a reflection of the convenience and accessibility that the new Circle Line stations will bring.

At $29,500, Bishan is the estate with the second highest median COV in Singapore. The estate, located at the central part of Singapore, is filled with a handful of well-known schools as well as Junction 8 Shopping Centre, a popular destination among residents and those living in neighbouring districts.

The other estates that make up the top five are Punggol, coming in third with a median COV of $27,000, followed by Pasir Ris with a median COV of $25,600 and Bukit Merah at $25,500.

Top 5 Estates with the Lowest COV

Top 5 Estates with the Lowest COV (StreetSine's Property Analytics)

Top 5 Estates with the Lowest COV (StreetSine's Property Analytics)

On the other end of the spectrum, the five estates bringing in the lowest median COVs have yet to even hit the $20,000 mark. It is notable that most of them are found in the Northern and Western parts of Singapore.

The lowest recorded median COV is $18,000, and it is shared by three estates: Woodlands, Sembawang and Choa Chu Kang. The three estates are located at the North-West region of Singapore.

One possible reason for the low COVs is the distance these districts are from Central Singapore. For instance, it takes close to an hour to get from Choa Chu Kang to town, despite intricate public transport networks. Another explanation could be the large areas that these estates cover. As there tend to be more sellers in larger areas, sellers feel the need to maintain a competitive edge and keep prices low.

The estate with the fourth-lowest COV is Jurong West, with a median COV of $19,000, followed by Ang Mo Kio at $19,996 median COV. Jurong West however, which also faces the issue of being located far away from Central Singapore, may see a rise in median COV in future because of the newly improved Jurong East interchange station.

20 Jul

Most home buyers in Singapore are willing to offer up to S$25,000 in COV

Survey results by iProperty.com.sg highlights home buyers’ willingness to secure their dream homes 

Singapore’s number one property website, iProperty.com.sg, revealed in a recent Quick Poll in July, the market’s willingness to secure their dream property, even if it meant paying more than $45,000  in cash-over-valuation (COV) to seal the deal.

Key findings from the survey revealed that:

  1. Most survey respondents (63.3%) are willing to offer between S$10,000 to S$25,000 in COV to ensure they secure their dream HDB homes.
  2. The remaining respondents are willing to offer higher COV for their dream homes, with 16.8% willing to offer between S$25,001 to S$35,000, and 6.7% are willing to offer between S$35,001 to S$45,000.
  3. 13.2% of respondents are willing to offer S$45,001 and above.

If given the opportunity to own the HDB home of your dreams, with ideal location and facilities, how much COV (cash-over-valuation) are you willing to offer to ensure you secure that property?

A total of 327 respondents took part in this online survey from 28 June 2011 to 19 July 2011.

This comes on the heels of recent reports of a Tampines unit at Block 151 of Tampines Street 12 which sold at $150,000 COV, further reinforcing current market sentiments that saw the return of higher COV with the tightened supply in the housing market.

In response to Singapore’s all-time-high property prices, National Development Minister Khaw Boon Wan recently commented, during his first official visit to the HDB Hub, that prices of HDB’s new flats are typically pegged to prevailing resale prices, but are discounted.

Acting on the public’s call for more affordable housing, the HDB had seemingly lowered indicative starting prices for new flats recently launched in Sengkang, Tampines, Jurong West, Bukit Panjang and Yishun – as compared to the previous BTO launch in May 2011.

Commenting on Minister Khaw’s recent measures to alleviate the demand-supply conundrum, Shaun Di Gregorio, Chief Executive Officer of iProperty Group Limited “Home buyers are now getting closer to obtaining their dream homes – be it new or resale flats – as signs of the stabilising housing market are beginning to appear. Not only are we going to see more and more new HDB flats being offered in bumper BTO launches in months to come, our recent Quick Poll also suggests that most home buyers are willing to fork out top dollar to secure flats in ideal locations and with good facilities nearby.”

He added, “However, there is still some way to go in addressing affordability issues – home buyers are still anxious to see what comes with the review of the income ceiling for first- timers to buy BTO flats, as well as the review of the Design, Build and Sell Scheme (DBSS), and how this affects prices of the remaining 9,500 new flats by year end, and subsequently, the impact on resale prices.”