COV fell to $22,000 last month

National Development Minister says the market has not yet felt full impact of cooling measures
by Joanne Chan

Updated 12:32 PM Dec 07, 2010

SINGAPORE - While cash-over-valuation (COV) and the number of transactions in the Housing Board resale market are heading south, National Development Minister Mah Bow Tan believes it will be another one to two months before the full impact of the Government's cooling measures is felt.

In an exclusive interview with MediaCorp, Mr Mah revealed that the median COV last month was $22,000, down $3,000 from that for October. This marks the second month in a row the COV has fallen, a sign property cooling measures set in August are taking effect,

And the number of HDB resale transactions has fallen some 30 per cent in the fourth quarter thus far compared to last quarter.

The COV hit a high of $30,000 for two straight quarters this year, sparking concerns that first-time home-buyers might be priced out of the resale market.

Said Mr Mah: "Now, you are seeing that resale prices and the COV are not only stabilising but are starting to come down. So, I think there's really no need to rush (to buy a flat)."

Transaction numbers from property firm Dennis Wee Group (DWG) also reflect the downward trend of COV and sale volume.

DWG director Chris Koh said he expects the COV to drop to $20,000 this month.

He said: "Things usually slow down (in December) because of Christmas, New Year, school holidays ... So, with the measures in place, (and) with new flats coming up, we should see demand ease off a little."

Mr Mah said the Government was comfortable with the current situation and there was no need for further cooling measures for now. More steps would be taken only if necessary, he added.

While prices appeared to have stabilised, Mr Mah acknowledged housing "would probably be more (of) an issue" at the next General Election.

He said: "It's always been an issue at every election as far as I can remember ... The main thing is that in an election, we have to offer - to the residents (and) voters - our platforms, our polices. Whoever can convince the voters they can do a better job in improving their lives will get and deserves to get the vote."

Source: www.todayonline.com