COV data misleading, says Khaw

National Development Minister Khaw Boon Wan used the apples and oranges analogy to clarify why the Housing & Development Board (HDB) has ceased the publication of overall median cash premiums paid by home buyers beyond the valuation of flats across all estates.

He said that the overall median cash-over-valuation (COV) figure for resale flats is “misleading and quite irrelevant”, as the data on the type of flats transacted and their locations changes from month to month.

He stated that while the government is anxious about higher resale flat prices, it will be chiefly resolved in three to five years, when more Build-to-Order (BTO) units are ready.

For instance, more flats could be sold in one month in areas such as Ang Mo Kio, where prices tend to be higher. The following month, more may be sold in Woodlands, where property prices are normally lower.

“To me it is very apple to oranges,” said Mr Khaw. “If housing type changes month to month and location changes month to month, the figures will move up or down, and you think prices are going up or down. I think that is a wrong conclusion.”

Source : PropertyGuru – 25 Jul 2011

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