Upfront Cash For HDB Resale Flats Now Lower
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It was recently reported that owners are now increasingly willing to accept a lower cash over valuation (COV) amount in order to sell their HDB flats.
Some deals may be done at valuation but no drop in prices; big flats moving slowly
THE private home market is at a standstill and prices have fallen as the global financial crisis scares buyers away. Yet, the HDB resale flat market remains active and prices are still fairly strong. However, there are increasing signs that this segment of the market is no longer immune to the economic slowdown. While prices have not dropped, the cash amount that buyers typically pay on top of the flat’s valuation has fallen more significantly, experts said.
This cash-over-valuation sum – or what the market refers to as the COV – is usually a must for most transactions, especially in a booming market. Now that the HDB market outlook is less upbeat, some deals are even likely to be done at valuation, which means no COV is required.
‘We started to see the impact of all the bad news only in the past month,’ said C&H Realty managing director Albert Lu.
‘News of the stock market falling and retrenchments impact buyers’ sentiment. Now, they are saying: Maybe we should wait.’
To entice those sitting on the fence, sellers have lowered their COV expectations by as much as 50 per cent, said Mr Lu. Most COVs now roughly range from $5,000 to $30,000 for selected areas, according to Mr Eugene Lim, associate director of ERA Asia Pacific.
‘Until recently, a COV of $5,000 was almost unheard of.’
A property agent said she is finalising a deal for an executive flat in Hougang in which the seller is willing to sell at valuation, without any COV.
‘I noticed that there are more ads asking for zero cash,’ she said. ‘Old flats that need a lot of renovation could be sold for zero cash.’
Source : Lushhomemedia