Sengkang, Punggol resale-flat sellers feel the pain

Sengkang, Punggol resale-flat sellers feel the pain

FOR some, the housing dream at Sengkang and Punggol has turned sour. More than half of all resale transactions in these estates last month were found to have closed below valuation.

The sellers were the hardest hit among those from Housing Board towns that clocked deals with a negative cash-over-valuation, revealed the Singapore Real Estate Exchange yesterday.

Overall, one in five HDB resale deals was closed below valuation.

Other areas that had more than 30 per cent of all transactions made below valuation included Choa Chu Kang, Sembawang and the outskirts of Woodlands.

Executive director Andy Choa of real-estate firm DWG pointed out that the "abundance of willing sellers" in Sengkang and Punggol could be related to the demographics of homeowners in both areas.

"They are mostly young couples who could be looking to move elsewhere to suit their families' evolving needs," he said.

Mr Nicholas Mak, executive director of research and consultancy at SLP International, said that the ramped-up supply of Build-To-Order flats in both areas could pressure homeowners into selling their flats at a lower price than expected.

"It is likely that sellers are choosing to sell their flats now, rather than run the risk of selling them at even lower prices when new flats come up in the future," he said.

However, both Mr Choa and Mr Mak said that, because home prices in Sengkang and Punggol remain high, sellers still stand to gain even if they let go of their flats at valuation, or lower.
Flat buyers raise hopes as COV hits 4-year low

OVERALL Housing Board (HDB) resale cash premiums tumbled to a new low of $5,000 last month, according to flash estimates released by the Singapore Real Estate Exchange (SRX) yesterday.

It was the lowest cash-over-valuation (COV) since June 2009, when it dropped to $3,000 during the global financial crisis.

Over the course of last year, the median COV for resale homes has dropped by more than 85 per cent from its peak of $35,000 last January.

A rising number of sellers are selling below valuation, too. SRX records show that a fifth of HDB resale deals last month closed below valuation, the highest ratio seen since the financial crisis, which saw a quarter of deals closed below valuation in May 2009.

The chief executive of PropNex Realty, Mr Mohamed Ismail, said that cash premiums could slip further in the next few months, on the back of an increasing number of negative COV transactions.

He expects more deals to be done at valuation or lower, but added: "Flats in mature estates or with good locality attributes will still be fetching reasonable premiums."

Mr Eugene Lim, key executive of ERA Realty, said that resale-transaction volume is expected to be eight to 10 per cent better than that last year, which saw a historical low of less than 20,000.

He said: "As resale prices and COV continue to decline, and with the Government decreasing the supply of new three-room and larger flats, we may see more buyers back in the resale market over the course of this year."

For writer Gregory Leow, 39, who has been looking for a flat for a year, the lower COV for resale flats is good news.

"My wife and I didn't even consider buying a resale flat previously, because the COV was just too high. But things have moved a step in the right direction for us now," he said.

tsjwoo@sph.com.sg
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- wong chee tat :)