The latest COVs flash estimates show that COVs have reached zero and may fall further into negative COV
The recent flash estimates last month show that COVs in HDB resale transactions have reached zero. A year ago, the overall median COV for HDB resale flats was $32,000 (SRX Research). The few areas that led the drop in overall median COVs last month are Bukit Panjang, Punggol, Sembawang, Sengkang and Woodlands. Whereas Bedok, Bukit Batok, Choa Chu Kang, Geylang, Jurong West, Tampines and Yishun had recorded a zero overall median COV. This has once again trigger the issue on whether the COV figures should be publicised.
Property analysts and industry experts are concerns that the COVs may fall further to negativity and would bring about a downward spiral of HDB resale prices. Negative COVs means Cash Under Valuation. Instead of asking for cash over valuation, sellers are lowering their price below valuation. People used the published COV as a benchmark to price their home above the median COV when prices are rising. Market experts are concern in the current situation, when prices are falling, people would use the COV as a benchmark to price their home below the COVs, causing a drop in prices.
However, some analysts feel that COV is important in providing a reference point for buyers and sellers. They believe that COVs has a part in stopping over-buying in the average and buoyant market. In current market situation, the low or negative COV can reduce chances of sellers giving in for low offering price.
HDB published the overall median COVs to improve market transparency and address the market perception of high COVs.
Source:SRX Research. (6 Mar 2014). http://www.srx.com.sg/srx/index.jsp?link=blog.
For more District Guides, you can head over to iProperty.com Singapore.
The recent flash estimates last month show that COVs in HDB resale transactions have reached zero. A year ago, the overall median COV for HDB resale flats was $32,000 (SRX Research). The few areas that led the drop in overall median COVs last month are Bukit Panjang, Punggol, Sembawang, Sengkang and Woodlands. Whereas Bedok, Bukit Batok, Choa Chu Kang, Geylang, Jurong West, Tampines and Yishun had recorded a zero overall median COV. This has once again trigger the issue on whether the COV figures should be publicised.
Property analysts and industry experts are concerns that the COVs may fall further to negativity and would bring about a downward spiral of HDB resale prices. Negative COVs means Cash Under Valuation. Instead of asking for cash over valuation, sellers are lowering their price below valuation. People used the published COV as a benchmark to price their home above the median COV when prices are rising. Market experts are concern in the current situation, when prices are falling, people would use the COV as a benchmark to price their home below the COVs, causing a drop in prices.
However, some analysts feel that COV is important in providing a reference point for buyers and sellers. They believe that COVs has a part in stopping over-buying in the average and buoyant market. In current market situation, the low or negative COV can reduce chances of sellers giving in for low offering price.
HDB published the overall median COVs to improve market transparency and address the market perception of high COVs.
Source:SRX Research. (6 Mar 2014). http://www.srx.com.sg/srx/index.jsp?link=blog.
For more District Guides, you can head over to iProperty.com Singapore.