The increase of 3.7% for HDB’s Resale Price Index for 2008 Q1, though lower than the last two quarters, was somewhat expected considering the current property market sentiment. However, PropNex CEO Mohd Ismail feels that such an increase is sustainable in the long term, given the economy’s positive outlook. Hence, double digit growth for 2008 is attainable.
Overall, the COV (Cash-Over-Valuation) for the first quarter went down to $21,000. Interestingly, some central areas such as Bishan saw a $9,000 drop for 5-room flats and a $25,000 drop for Executive flats in terms of COV. Even Marine Parade’s COV for 5-room flats plummeted $15,000 to $50,000.
Generally, it can be seen that the trend for higher COV is diminishing as the number of private property and en-bloc downgraders diminish.
Overall, Mohd Ismail expects the COV to continue to stabilise at $20,000 islandwide for the rest of 2008, due to the greater demand for resale housing and the drying up of HDB’s surplus units.
The rental of HDB flats remained healthy with the overall rental price across the board rising by 7–10%. The demand for HDB-approved rental flats is still apparent with the volume increasing by 9%, from 3,287 units in the last quarter to 3,581 units this quarter.