Demand for smaller flats explains higher COV

According to Mr. Adam Tan, manager of PropNex realty’s Corporate Communications and marketing, although location plays a significant part in cash-overvaluation (COV) requests of sellers for resale flats, there are still other reasons that could influence the COV. He was referring to the letter made by Mr. Seow Weng Keong, 'High COV for flat in non-prime area'.

Another factor that Mr. Seow was asking about the high COVs for the units was that in the previous three quarters (from the fourth quarter of the previous year to the second quarter of this year), the average COV for flats with three and four bedrooms has been higher compared to the average COV of bigger flats.

Mr. Adam Tan explained that one reason for such is the enormous demand for smaller units due to the economic recession experienced by countries all around the world. He also added that people are trying to downgrade their properties. In his own perspective, such concept explains the reason why smaller units are coming with such high cash-overvaluation.

Home buyers with short budget who wanted to avoid having to pay for high COV and needs to move to the flat as soon as possible are notified to seek for flats that are on lower floors and not just on outlying areas.