Cash premiums for resale flats near record high

Cash premiums for resale flats near record high

SINGAPORE - CASH premiums for HDB resale flats have climbed to a median of $34,000 over the last two months, just $2,000 short of the record reached last year.

This has pushed the median resale flat price to $455,000 in the fourth quarter thus far, a 1.1 per cent rise from the quarter before, said the Singapore Real Estate Exchange (SRX) in its latest report.

Cash-over-valuation (COV) premiums are what buyers pay over and above the valuation of a flat. As they have to be paid in cash, COVs have an impact on the affordability of resale flats.

Since tracking began in 2007, the highest median that COVs have reached is $36,000, in the third quarter of last year.

Property agency bosses say they expect COVs to continue to rise as long as the supply of resale flats remains tight.

With prices of private property still rising, more potential buyers will also find themselves priced out and turn to the Housing Board resale market.

These buyers can put up considerable COVs, noted ECG Property managing director Shawn Tan.

"The private market must cool down before resale COVs can come down," he said.

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