With the drop in resale flat transactions, the number of units with high Cash-over-Valuations (COVs) has fallen too.
According to data from the Singapore Real Estate Exchange, in the first quarter of 2013, there were 56 flats with COVs exceeding S$100,000.
The figure dropped some 20 per cent to 44 in the second quarter.
In the first quarter, the top five towns with most flats commanding COV values exceeding S$100,000 were Bishan, Toa Payoh, Geylang, Tampines and Ang Mo Kio.
In the second quarter, Bishan and Toa Payoh still emerged tops, followed by Pasir Ris, Hougang and Bukit Merah.
Analysts felt that flats in Bishan and Toa Payoh are popular so it is not surprising that buyers are still willing to pay higher prices.
Flats in Pasir Ris and Hougang could command high COVs, perhaps because they are near the MRT stations, have larger floor areas or have had appealing renovations.
Analysts also pointed out that with the Housing and Development Board launching more Built-to-Order flats, the resale market has cooled.
Median COV values have dropped from S$33,000 in the first quarter to S$28,000 in the second quarter.
In the next six months, they could drop further.
Chris Koh, director of Chris International, said: “I won’t be surprised if it will be in the range of S$15,000 for median COV, which to me, is a good level, because that would mean that we are looking at maybe COVs of sometimes S$10,000 for flats that are not in very prime locations and are not renovated, for example, versus some that may be slightly higher than $15,000.”
Source : Channel NewsAsia – 1 July 2013