{"id":119937,"date":"2021-01-29T02:15:08","date_gmt":"2021-01-28T19:15:08","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/more-buyers-willing-to-pay-extra-cash-for-hdb-resale-flats\/"},"modified":"2021-02-02T17:51:48","modified_gmt":"2021-02-02T10:51:48","slug":"more-buyers-willing-to-pay-extra-cash-for-hdb-resale-flats","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/more-buyers-willing-to-pay-extra-cash-for-hdb-resale-flats\/","title":{"rendered":"More buyers willing to pay extra cash for HDB resale flats"},"content":{"rendered":"


\nOne of the factors\u00a0causing the higher demand and premium prices of resale HDB flats include buyers\u2019 desire for a larger living space following the experience during the circuit breaker.\u00a0
\nProperty agents has observed a growing number of buyers who are willing to pay extra cash on top of actual valuations for HDB resale flats since July last year, reported Channel News Asia (CNA).
\nHanafiah Yusof and his wife, Nirmala, for instance, paid an extra $45,000 in Cash Over Valuation (COV) \u2013 which refers to the amount representing the difference between the unit\u2019s sale price and official valuation by HDB \u2013 for an executive apartment in Clementi. This amount is paid by buyers fully in cash.
\n\u201cOur agent did pre-empt us that because of the area \u2013 a mature estate \u2013 we have to expect to pay more,\u201d Nirmala told CNA.
\nShe noted that the location was \u201cnice\u201d as it was \u201cnear our kids\u2019 schools, near our parents, near my workplace, and amenities around there were a lot\u201d.
\nRecommended article:\u00a0BTO vs Resale Flat vs Condos in Mature Estates: Which Suits You Best?
\n\u201cIt checked all our boxes \u2013 on a high floor, and the space and unit were well-maintained,\u201d she added.
\nNonetheless, the COV amount was still above the $20,000 to $30,000 the couple had expected to pay for the 1,580 sq ft unit.
\n\u201cBut I think we weighed our options and I think it\u2019s good that from this sale of (our current) unit, it was enough for us,\u201d said Mr Hanafiah.
\nThe COV component had emerged as a cause of concern during the early part of the past decade, when official valuations was used as base price by some buyers and sellers, while negotiating the COV to add on it.
\nHDB had urged buyers to negotiate instead based on recent transaction prices, and focus on the flat\u2019s entire sum.
\nIn March 2014, HDB stopped publishing COV data, while changing the system such that the valuation of a flat is only revealed once buyers and sellers had already agreed on a transaction price.
\nIndustry players said transactions with COV became uncommon after the measures, and a tepid resale market.
\nHowever, property experts are seeing a revival of the trend amid a robust HDB resale market, said CNA.
\nHDB resale prices rose to their highest level last year since 2012, with transactions rising sharply to an eight-year high.
\nLim Yong Hock, Key Executive Officer at PropNex, said while the agency does not gather information on how transactions by their clients compare to valuation prices, agents have been seeing more COV transactions.
\nSee also:\u00a0Comparing HDB Flats in the Same Estate: How Old Should You Go? (BTO vs Resale)
\n\u201cPlaces not even in prime locations, for example in the outskirts like Woodlands, Yishun or Bukit Panjang, are also seeing this kind of situation,\u201d he said as quoted by CNA.
\nThe trend regained prominence since the end of the circuit breaker period, said Ryan Tan, Senior Assistant District Director at OrangeTee, citing feedback from his team of around 40 agents.
\nHe believes that around 90% of their resale transactions now involve COV sums, which typically range between $5,000 and S$20,000, although he cautions that the figure may not represent the whole market.
\nMike Poon, Group Division Director at ERA Realty, noted that the number of transactions taking place above valuation prices has tripled to at least five to six out of 10.
\nLim attributed this to higher demand from resale flat buyers. More buyers turn to the resale market as they are unable to wait for the delayed completion of Build-to-Order flats amid the pandemic.
\nTan also pointed to buyers\u2019 desire for a larger living space following the experience during the circuit breaker as well as enhanced CPF housing grants as possible reasons for the increased demand.
\nERA Realty Associate Marketing Director Sofian Roslan noted that paying COV of between $10,000 and $20,000 is now \u201cquite common\u201d, with flat types, such as executive apartments and jumbo flats, attracting higher premiums.
\nSuggested read:\u00a0Is Now the Right Time to Buy an HDB Resale Flat?
\nLim expects the trend to continue in the first half of 2021, due to the lag time between the completion of transactions and when they start to change valuations.
\n\u201cValuers usually use past transactions as a benchmark, so when the new prices are not recorded yet, the valuation is not likely to follow the current market price,\u201d he explained.
\nLee Sze Teck, Head of Research at Huttons Asia, however, expects the trend to stabilise over the coming months.
\n\u201cIf it was due to pent-up demand (from the circuit breaker), it would be dissipating over the few months already,\u201d he said as quoted by CNA.
\nLooking for a property in Singapore? Visit PropertyGuru\u2019s Listings, Project Reviews and Guides.
\n
\nSource : proppertyguru.com.sg\/Property Market
\nRead more…More buyers willing to pay extra cash for HDB resale flats<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

One of the factors\u00a0causing the higher demand and premium prices of resale HDB flats include...<\/p>\n","protected":false},"author":1,"featured_media":119938,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-119937","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-news"],"jetpack_featured_media_url":"https:\/\/i1.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/01\/HDB-prices.jpg?fit=840%2C410&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-vct","jetpack-related-posts":[{"id":120551,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/proportion-of-hdb-resale-buyers-paying-cov-on-the-uptick\/","url_meta":{"origin":119937,"position":0},"title":"Proportion of HDB resale buyers paying COV on the uptick","date":"July 6, 2021","format":false,"excerpt":"\r Despite the increase, the ministry noted that the majority of HDB resale buyers did not pay any COV, with the median COV for each year remaining at $0. The proportion of HDB resale buyers paying a Cash Over Valuation (COV) has been on the uptrend, rising from about one\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i2.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/07\/New-HDB-flats.jpg?fit=820%2C410&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":121433,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/bto-bookings-cancellations-down-in-2020\/","url_meta":{"origin":119937,"position":1},"title":"BTO bookings cancellations down in 2020","date":"August 13, 2021","format":false,"excerpt":"\r BTO bookings cancellations down in 2020There were 1,700 cancellations in 2020 as\u00a0compared to the\u00a01,450 appeals between 2018 and 2019.\u00a0 The Housing and Development Board (HDB) said about 1,700 home buyers cancelled their Build-To-Order (BTO) flat bookings last year, reported Channel News Asia (CNA)\u00a0 This is lower as compared to\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/08\/BTO-FLAT-hdb.jpg?fit=820%2C410&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":102628,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/hdb-resale-prices-down-0-9-in-2018\/","url_meta":{"origin":119937,"position":2},"title":"HDB resale prices down 0.9% in 2018","date":"January 2, 2019","format":false,"excerpt":"\r HDB resale flats in the Ghim Moh area. Resale prices of HDB flats dropped by 0.9 percent for the whole of 2018, revealed the Housing and Development Board (HDB) on Wednesday (2 Jan). For the fourth quarter of 2018, resale flat prices dipped by 0.2 percent from the previous\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":49345,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/get-the-guru-view-hdb-resale-a-buyers-market\/","url_meta":{"origin":119937,"position":3},"title":"Get the Guru View: HDB resale – A buyer\u2019s market","date":"March 24, 2017","format":false,"excerpt":"\r Upcoming BTO launches could draw demand away from the HDB resale market. The HDB resale market has seen prices stay flat since Q2 2015. With an increase in the grants available for use, will this market start to see a pickup in 2017? We give you the Guru View.\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2017\/03\/Guru-View-HDB-Resale-Price-Index-and-Transcation-Volume.jpg?fit=792%2C442&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":72659,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/temporary-blip-in-hdb-resale-transactions-dwindling-first-timer-demand\/","url_meta":{"origin":119937,"position":4},"title":"Temporary blip in HDB resale transactions, dwindling first-timer demand","date":"November 23, 2017","format":false,"excerpt":"\r View of HDB flats in the Ghim Moh area. (Photo: Chen Siyuan: Wikimedia Commons) The latest data showed a 0.7 percent drop in HDB resale prices in Q3 as compared to the previous quarter. We investigate some reasons for this. 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