Cash premiums for resale Housing Board flats have fallen further and faster than expected as housing curbs continue to bite.
According to flash report from Singapore Real Estate Exchange (SRX), the median cash-over-valuation (COV) dropped to $5,000 last month from $8,000 in November. This is the second consecutive month that cash premiums have fallen below $10,000. PropNex cautions that it could slip further in the next few months—on the back of more negative COV deals being concluded.
"We are expecting COVs to continue to moderate, especially during the festive period. However, flats in mature estates and/or with good locality attributes will still be fetching reasonable premiums,” said Mr Mohd Ismail, CEO of PropNex Realty.
Now that the HDB market outlook is less upbeat, we foresee that more deals are likely to be done at valuation, or even at negative COV.
“In view of the current sentiment, HDB resale flat prices will most likely head south,” said Mr Mohd Ismail.
Prices, however, will not plunge as there is a large base of potential buyers, he added.
PropNex expects 2014 to witness a dropping number of transactions and some price correction and expects resale flats prices to drop by around 5 to 8 per cent.
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