National Development Minister Khaw Boon Wan has released data on the extent of Cash Over Valuation (COV) paid by different buyer groups.
Writing in his blog, under the heading “Who Bids High?”, Mr Khaw revealed that private property owners paid the highest median COV of S$45,000 in the last quarter of 2011.
The next highest was S$34,000 in median COV paid by second-timers.
First-timers paid S$33,000, permanent residents S$32,000, while singles paid the lowest median COV of S$31,000.
Mr Khaw said his ministry monitors HDB resale prices and publish them for information of potential buyers and sellers.
Such transparency, he said, helps make the market run better.
The COV issue was raised in Parliament on January 16.
Mr Khaw said he decided to share the breakdown by the different buyer groups so as to give a complete picture.
Responding to Mr Khaw’s figures, property analysts said data on the number and types of flats purchased by the respective groups would be helpful for a better understanding of the causes of high COVs.
ERA Realty Network’s key executive officer Eugene Lim said the data released by Mr Khaw is general but it does show that private property owners are the ones paying higher COVs.
He said as private property prices are at an all-time high now, those who have cashed out would have easily made significant profits.
These buyers have the capacity to pay higher COVs, especially for the larger flats they usually buy.
He said the other group are those that have made profits from enbloc sale.
He said second timers are also able to pay higher COVs for a similar reason as they have profited from the sale of their flats.
Source : Channel NewsAsia – 18 Jan 2012