SOME resale flat sellers asking for high cash premiums have been brought back down to earth by the recent property rulings.
Agents have seen a handful of owners lowering their cash- over-valuation (COV) quotes, especially if they are asking for more than $60,000 initially.
Owners who have a real need to sell their flats and are demanding less to attract buyers.
C&H Realty managing director Albert Lu observed that some clients have reduced by up to $10,000. Accordingly, they tend to be serious sellers, example those who have already gotten a new house and need to move.
There are also a few who live near MRT stations and were using the location as a bargaining chip for high COVs, somewhere between $50,000 and $60,000. Now that the market has slowed, ‘they are more willing to reduce the COVs,’ he said.
Jeffrey Hong, HSR executive director (agency) also noticed that flat owners who were asking for ‘ridiculously high’ COVs have become more realistic. These flats tend to be in sought-after areas such as Marine Parade, with asking COVs of $60,000 to $80,000.
However he stated that sellers who had asked reasonable levels of COV in the range of $30,000 to $40,000 have held on to their demands.
COVs had been increasing steadily before the announcement of the new rules. As the economy rebounded and demand for resale flats strengthened, the median COV surged to $30,000 in the second quarter of 2010, from $3,000 in Q2 2009.
Exceptionally high COVs of $80,000 to $100,000 for a few flats in popular towns such as Bishan contributed to the upward trend. Reports of such deals encouraged owners to raise asking prices for their flats further.
The new rules – which include restricting the concurrent ownership of public and private properties – have introduced caution to the market.
Sellers have become more realistic because they know that buyers are not rushing to buy, said Dennis Wee Group director Chris Koh.
‘We are educating owners: if the price offered is good, accept it,’ he said. ‘If you call for such a high COV, nobody will even want to view.’
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