Resale prices of non-landed private residential, HDB flats rise in October

Resale home prices of both non-landed private residential units and HDB flats continued to climb in October against the third quarter 2012.

Data released by the Singapore Real Estate Exchange (SRX) showed that the unit resale price for non-landed private residential rose 4.1 percent in October to $1,209 per square foot.

SRX compiles data from 11 top property agencies in Singapore.

The report found that resale prices of private homes rose across all regions, with non-landed homes in the city fringe seeing the sharpest increase at 4.5 percent, compared to the third quarter of 2012.

This is followed by a 4.2 percent increase in the suburban areas, and a 1.8 percent increase in the core central region.

SRX noted that the price gap between non-landed private homes in the suburban areas and those in the city has narrowed to a new low of 84.8 percent.

“I think the the price premium between the CCR and OCR will continue to narrow in the next one year,” said Eric Tan, the CEO of GSK Global.

“Subsequently, I think it will remain relatively stable at around 70 percent in the medium term.”

Meanwhile in the HDB resale market, SRX said overall cash-over-valuation (COV) continues its uptrend to reach $33,000 in October, a 10 percent increase from the third quarter.

COV refers to a cash premium that is paid to the seller, on top of the valuation of the property.

SRX added that October’s COV is $3,000 shy of the five-year all-time high of $36,000 COV attained in the third quarter of 2011 since tracking began in 2007.

Nicholas Mak, the research head of SLP International said: “Even if someone buys a four-room flat with higher COV, the price is still around $700,00, still below $1 million. But for a family to buy a three-bedroom private condominium, right now, the price is typically above one million.

“A higher COV actually enables some of the HDB upgraders to sell their HDB flats at a higher price and they are able to buy from higher COV and upgrade to private condominiums. So in a way, higher COV is not really pushing people to buy private condominiums, it is actually encouraging some people to buy Executive Condominiums.”

The higher COV also helped to push overall HDB median resale price to a new high of $455,000 – a 1.1 percent increase from $450,000 in the third quarter 2012.

On the rental market, SRX said overall HDB median rents remained unchanged at $2,400 while overall gross rental yield of non-landed private homes fell to 3.87 percent in October.

Source : Channel NewsAsia – 9 Nov 2012

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