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Minister for National Development, Khaw Boon Wan, has taken to his blog to share data on the amount of cash-over-valuation (COVs) paid by different groups of buyers, following his parliamentary response on Monday which caused a lot of controversy.
The figures show that private property owners and second-time buyers paid the highest COVs for resale flats in Q4 2011.
In his latest blog entry titled “Who Bids High?”, Mr Khaw highlighted that private property owners topped the list for median COV paid at S$45,000, while second-timers, first-timers, permanent residents (PRs) and singles paid S$34,000, S$33,000, S$32,000 and S$31,000 respectively.
“We monitor HDB resale prices, and publish them for information of potential buyers and sellers. Transparency helps make the market run better,” wrote Mr Khaw.
His latest post comes after PropertyGuru ran an article titled “Don’t put the blame on PRs: Khaw” this week, in which he asserted that PRs should not be blamed for rising resale HDB flat prices, but that local private property owners are responsible for pushing up the cash premium on flats.
However, despite Mr Khaw’s insistence that PRs do not play a part in rising resale flat prices and with the statistics to support this, many Singaporeans think otherwise.
On PropertyGuru’s Facebook page, readers commenting on the issue seemed adamant that stricter regulations should be placed on PRs buying resale flats. A comment from Susan Lux read, “The valuation is overpriced. The older (a HDB flat) is, the more its value appreciates — something is wrong! PRs must (be made to) stay more than 10 years (in a resale HDB flat) so they cannot make too many sale turnovers. This will reduce the chances of many PR buyers. Should they decide to sell, a higher stamp duty should be imposed.”
Likewise, on Yahoo! Singapore where the article was carried, many people commented that the government should do more to control resale flat prices. One reader known as Justice Law said, “We do not blame the PRs fully but blame you (the government) fully for not doing your job well at controlling resale flat prices. Even in Thailand, flats are only for Thais. Why are Singapore flats speculated by PRs at such high prices?”
However, Tejaswi Chunduri, real estate analyst at PropertyGuru, feels the government’s hands are tied when it comes to the issue of COV. “COV is purely between a buyer and seller. If the buyer is ready to pay a higher price for a better location, the seller would certainly be happy. Obviously private property owners and second timers have that kind of money to spend, and this is reflected in the data provided by the Ministry of National Development (MND).”
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Reader Comments: (5 comments)
Excellent comment by NEWING
When you are seeking a house, you hope there's no one else buying. IF you are selling a house, you hope the whole world will compete for it.
The government is still in self denial. I went to view 4 room resale flat. One PR offered S$50k as COV, and this Khaw said PR is not to be blamed for high COV?
COV was there in the first place because of MBT request for valuation to by done for the HDB. MBT should not have done it in the first place which is wrong. KBW should do away with COV by taking the valuation away.
Seriously, I really wonder if Susan were to sell her flat and a PR is willing to pay a high COV for her unit, will she take the offer? :)