Saturday, September 5, 2009

Solve key concern - soaring resale prices

I REFER to Monday's letter, 'How HDB keeps it affordable', and wish to highlight the following:

  •  While cash over valuation (COV) is not determined by the Government, rising COV is an indicator that housing demand exceeds supply. Buyers of resale HDB flats are now squeezed by high COV and asking prices demanded by sellers.
  • Information on recently transacted resale prices on the HDB website may have little relevance since they were concluded three to four months ago. Given the current market frenzy, it is a challenge for today's buyers to find flats that can still be transacted at prices which prevailed three months earlier.

 HDB pointed out that first-time buyers used 21 per cent to 25 per cent of their monthly household income to service their loans on new and resale flats respectively in non-mature estates, which is well below the international affordability benchmark of 30 per cent. For a more meaningful comparison, average figures based on mature and non-mature estates should be used, which is more reflective of general affordability.

More important, I urge HDB to address the ultimate concern of current HDB flat buyers - the soaring resale prices.

Chew Kim Cheer


Source: Straits Times, 5 Sep 2009

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