CERTAIN popular public housing estates are commanding the biggest premiums from eager buyers.
Fresh data from the Housing Board (HDB) yesterday showed that flats in established towns such as Queenstown, Marine Parade and Bukit Timah are pulling in the biggest cash top-ups.
The difference between the bank’s valuation and the actual price paid is known as the Cash-over-Valuation (COV).
The median COV hit a record $24,000 in the fourth quarter across all towns islandwide and all flat types.
In some central locations such as Bukit Timah, the overall median COV paid for flats trebled to $30,000 in the fourth quarter from the third quarter.
Further out, even at suburban spots such as Punggol, median COV shot up 195 per cent to $28,000, while at sleepy Pasir Ris, it jumped 186 per cent to $20,000.
Housing agents on the ground say cash-rich buyers – both locals and permanent residents (PRs) – are driving the recent rally in HDB resale flat prices and the resulting high COV levels. PRs are the only foreigners able to buy HDB flats.
PropNex agent Wilson Low, 44, recently brokered a sale where a local couple paid $730,000 for a five-room flat on a high floor at Cantonment Close. That meant an eye-popping $85,000 COV.
‘The buyers, flush with cash from a private property en bloc sale, paid the whole sum without a bank loan. We are seeing quite a few such cash-rich buyers who are meeting the high demands of sellers,’ he said.
He said PRs, mostly from China, Malaysia and Indonesia, tend to favour central locations and are more serious buyers than locals, given their urgent need for housing.
ERA Asia Pacific associate director Eugene Lim added that the resale market ‘will continue to be driven by families who have immediate housing needs, namely the second-time buyers and PRs’, for the near future.
HDB’s data showed median resale prices at central Queenstown hit $800,000 for executive flats and $645,000 for five-room flats, up from $712,000 and $619,000 in the third quarter respectively.
Other notable prices were fetched at Clementi, where the median resale price for an executive flat was $690,000, and Marine Parade, where a five-room flat was $625,000.
Monthly rents for HDB flats also inched up for all flat types in the fourth quarter from the third, except those for three-room units, which were flat at $1,500.
Rents for four- and five-room flats both rose about 3 per cent to $1,750 and $1,850 respectively, while rents for executive units rose 2 per cent to $2,000 a month.
HDB said yesterday that subletting transactions edged up by about 1 per cent to 3,902 cases in the fourth quarter, compared with those in the third.
The number of HDB flats approved for subletting rose to about 24,300 units in the fourth quarter – up from 23,800 units in the third quarter.
ERA’s Mr Lim said COV is ‘likely to continue to inch upwards in 2010 as we enter economic recovery’.
‘However, as we are not in very positive economic waters yet, COV increases are likely to moderate in the months to come,’ he said.
Source: Straits Times, 23 Jan 2010