THE Housing Board may be relooking its policy of releasing official cash-over-valuation (COV) figures of resale HDB flats, according to top executives of some property companies.
They say the board has signalled through its actions and in private conversations its intention to stop publishing these figures altogether, a move that would put the final nail in the coffin of a measure that is criticised for pushing up prices in the resale market.
In the past year, the HDB had moved to hold back several types of COV data, such as the nationwide median and the proportion of resale flats sold above valuation.
Last June, the Council for Estate Agencies began penalising agents who, in their advertisements, promise to get a specified amount of COV.
And earlier this month, at a closed- door session with bosses of property companies, a senior HDB executive expressed the inclination to do away with publishing the COV figures, those at the meeting told The Straits Times.
COV is the amount a buyer pays over and above the valuation of an HDB resale flat. As it must be paid in cash, it has a significant impact on affordability.
Currently, the HDB publishes the COV by flat type and the town where it is located.
With COVs stable, realtors like Mr Eugene Lim believe it is 'the best time' to hold back this last measure.
Mr Lim, who is key executive officer at ERA Realty, explained that in a bull market with COVs soaring, not having an official figure to refer to will intensify the escalation of cash premiums, as figures will be tossed around willy-nilly by agents.
COVs have now dropped one-third from their 2011 peak to average around $25,000 to $30,000, said realtors.
The fall is due largely to an aggressive set of measures to cool the property market, and rules being tweaked to let more people buy new flats from HDB.
In fact, calls have grown from realtors over the past few months for the HDB to get rid of its COV figures.
These figures put agents under pressure in a softening market, because sellers tend to take them as a base for the cash premium they desire regardless of the individual peculiarities of their property, said Mr Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group.
'Publishing COVs makes sellers think it is a benchmark below which they won't sell,' added C&H Properties key executive officer Albert Lu. 'This is not healthy.'
And since realtors can no longer advertise based on the cash premium they can get for sellers, the HDB should similarly de-emphasise COVs in the resale market entirely, Mr Lu added.
PropNex chief executive Mohamed Ismail, however, does not see the concept disappearing overnight, even if HDB ceases to provide the figures.
Buyers and sellers will still seek the information from their agents, he said, adding: 'What HDB is trying to do is break the mental model of sellers asking for minimum COV.'
SLP International Property Consultancy's head of research, Mr Nicholas Mak, said that large property firms would like HDB to stop publishing official figures as this would leave their data as the only source of COV information.
His view is that if HDB 'starts to censor COV information, it will just go underground because the demand is there'.
He added: 'It's like saying let's not have sex education and therefore kids won't be having sex. But what they will do is just learn the wrong things from their friends.'