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paul

Cov Dropping

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When will the dropping stop?

The median Cash-Over Value or COV paid for a Housing Board resale flat fell to zero in February 2014, down from $3,000 in January. This was the lowest median cash over valuation (COV) figure since SRX records began in 2006. It is also the first time COV hit zero since 2006.

About 37 per cent of deals, almost 4 in every 10 deals closed below valuation overall. In contrast, only 29.4 per cent of HDB resale deals closed below valuation during January 2014. Resale pricesfell by 1.8 per cent, which means that price level are now at same level as 20 months ago in June 2012. This was the sharpest month-on-month fall since prices started declining in April last year.And fewer flats changed hands.

cov-map-mar-20141.jpg?w=620

Out of the 28 towns in Singapore.12 towns saw zero or negative median COV, an increase from 7 HDB towns in January. Bukit Panjang, Punggol, Sembawang, Sengkang and Woodlandsclocked negative overall median COVs recorded in February 2014 while Bedok, Bukit Batok, Choa Chu Kang, Geylang, Jurong West, Tampines and Yishun recorded zero overall median COV.

hdb-transaction-feb-2014-cov.jpg?w=646&h

Year-on-year, resale volume dropped 6.3 per cent. According to flash estimates, 734 HDB flats were sold last month in the resale market, a 20 per cent month-on-month drop from the 918 units in January. Rental volume also dropped 13.7 per cent year-on-year. An estimated 1,118 HDB flats were rented in February, 25.3 per cent less than the 1,496 rental transactions in January. On a year-on-year basis, February’s rental volume posted a 11.9 per cent drop from 1,296 flats leased over the same month of last year.

number-of-hdb-transacted-jan-feb-2014.jp

number-of-hdb-rental-transacted-jan-feb-

 

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Adam Smith said the 'invisible hand' - market forces balance the supply and demand.

He also acknowledged the government intervention could artificially disturb the 'real picture of demand and supply'.

Question is 'how long' can such being artificially manipulated for the general public good?

Almost some 13 or 15 rounds of 'cooling measures' over period of 2 yrs then observe the 'down' trend.

Medicine takes time to work.

Once healthy, will chiong again.

I agar agar in another 3-5 yrs.

 

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Adam Smith said the 'invisible hand' - market forces balance the supply and demand.

He also acknowledged the government intervention could artificially disturb the 'real picture of demand and supply'.

Question is 'how long' can such being artificially manipulated for the general public good?

Almost some 13 or 15 rounds of 'cooling measures' over period of 2 yrs then observe the 'down' trend.

Medicine takes time to work.

Once healthy, will chiong again.

I agar agar in another 3-5 yrs.

The next round shoot up....never gonna come down again. So buy buy buy now...... :jawdrop:

 

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A see-saw game.

You go up and I come down......You come down & I go up. This is life.

Questions:

Get a roof or house FIRST? WHEN to start?

Answers:

-Roof is a need, car is a want.

-Roof appreciates (it is an investment!), car depreciates over time (It is an expense item).

-Both are 'biting the bullet' actions. Car shiok - zoom here and zoom there- pocket a big hole.

-SIngapore has no capital gain taxation

-By abt 45-50yo, should have a 'roof' fully redeemed, whether 3,4 ,5 rm or private.

-Sit down, do homework quick.

Side track.

4 asset classes theory, start as early as possible:

- Cash - for rainy days

- Insurance - expect the unexpected, investment.

- Property - enjoying shaded scene while watching rain falls and sun rises and sets. Rental income.

- Stock/equity - dividend yield and capital gain yield.

Need knowledge, skill... start as young as possible....

 

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Actually i think prices will stabilize and stay at this point.

People waiting for prices to fall might never see that coming,

in the end just buy and not think too much.

Private property is also stablizining, some of them are going for a good price, especially jurong and sengkang ones.

I found this project - Lakeville [remove property agent web] very attractive, the last condo in this area apparently sold out on the first day.

 

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Life is cruel & full of waves and tides.

Cooling measures are artificial waves.

Gov prefers 'to be in control' by applying artificial waves before real waves come which gov can't control.

High tide all boats rise.

Low tide all ugly things surface.

Real tide and waves yet to come.

Tide down, financial institutions switch off '$ taps' super fast make tide lower.

All credit rating agencies 'suddenly' start to work - bond/notes 'AAA' becomes 'CCC' within a night.

$ printing machine start working again..QE3 tapering & debt ceiling ...

So, see-saw, up and down.....

Edited by bepgof
 

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COV around Hougang is still sky high... encountered a few asking for 70K onwards :(

new changes surrounding valuation is baffling me as it follows market price?

Don't buy, wait for their valuation report to expire. From 10 March 2014 onwards, all valuation report can only be applied by BUYER.

 

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Don't buy, wait for their valuation report to expire. From 10 March 2014 onwards, all valuation report can only be applied by BUYER.

This cooling measure tool should have been applied earlier.

Make sellers LL - no-teeth-tiger.

Pty valuation business shrinks. Rpt price will go up.

Some valuation firms leave mkt, eventually financial institutions take over the role...then 1 rpt $600!

Who pays? KBW lor.

 

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I have been monitoring property prices since 2012, and bought a resale unit in Jan 2013 when everyone was commenting that price then was at peak. My next door neighbour did a valuation recently and the valuation has increased by $25K. Why is government trying to control COV but not valuation? Reason is simple - COV is money that goes directly from buyer to seller's pocket; the money bypass Govt. Therefore, Govt increase valuation instead hoping to reduce COV. Result? - buyer's money will go to Govt (HDB) and Govt also earn more income from stamp duty. Yes, COV may drop, but total purchase price is more expensive to a buyer because of higher valuation and higher stamp duty.

You expressed what I felt too... Very good explanation friend!

 

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I have been monitoring property prices since 2012, and bought a resale unit in Jan 2013 when everyone was commenting that price then was at peak. My next door neighbour did a valuation recently and the valuation has increased by $25K. Why is government trying to control COV but not valuation? Reason is simple - COV is money that goes directly from buyer to seller's pocket; the money bypass Govt. Therefore, Govt increase valuation instead hoping to reduce COV. Result? - buyer's money will go to Govt (HDB) and Govt also earn more income from stamp duty. Yes, COV may drop, but total purchase price is more expensive to a buyer because of higher valuation and higher stamp duty.

that's the part , some buyer don't understand. They only think of COV but never look at the whole picture (total purchase price)

 

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