COV for HDB flats rise despite new BTO supply

A week after PropertyGuru released a story about a S$900,000 executive flat at Pasir Ris, it received an exclusive tip-off from a property agent representing Knight Frank, saying that he had sold an executive mansionette in March this year for S$772,500.

The agent, who wants to be identified only as Ravin, said the flat is located at Block 151, Tampines Street 12.

“We were marketing this property over two Sundays and had about 50 plus buyers come for the viewing. Almost half were able to offer COV of more than S$100,000,” he said.

According to the valuation report, the flat had a market value of $625,000 in December last year. It was sold for S$772,500 in March, which means that the selling price of the unit was S$147,500 above its valuation.

Ravin noted that five buyers were able to offer a COV of more than S$125,000.

He added that most of the interested buyers were Singaporeans in their late 30s to late 50s.

“These buyers had the cash as most had sold off their landed property, private apartments, or HDB flats with good profits. Most were business owners.”

However, despite the high COV the mansionette achieved, the Pasir Ris executive flat will dominate the market if a successful buyer agrees to pay its S$900,000 asking price, which skyrocketed to S$918,000 after the story broke.

Taking recent transactions as the benchmark valuation price for the Pasir Ris area, executive flats are being priced at around S$600,000. The new asking price of S$918,000 will translate to a record COV of S$318,000.

Despite a series of cooling measures, some property experts said that COVs are unlikely to go down.

“The average COV now is about $30,000 to about $40,000 (or) to $50,000 in better and prime locations,” said Mark Teo, Senior Group Division Director at ERA, as quoted by a Channel News Asia report. “I believe that's because of the demand in the market, which comes from newlyweds as well as new PRs and new immigrants coming to Singapore. Although there's a lot of BTO coming up, COV unfortunately will still be going up in the near future.”

In contrast, Adam Tan, Corporate Communications Manager at PropNex, said the new BTO projects announced by the government will likely ease pressure on COV prices.

“COV prices are bottoming out at around S$21,000 and many first-time buyers will still be priced out of the resale market for this reason. Hence, they will definitely find great relief in this bumper crop of BTO flats.”

To contact the journalist, you may send your message to editor@propertyguru.com.sg