PRICES of resale flats in Q2 climbed 3.1 per cent quarter on quarter, at a pace that was almost twice that of Q1's 1.6 per cent, according to fresh data from the Housing & Development Board (HDB) yesterday.
It was harder to see how the median cash-over-valuation (COV) for all resale transactions moved. While median COVs rose in several towns across all flat types, HDB broke from tradition and did not publish an overall median figure for deals closed across the island.
In fact, HDB is re-examining the COV practice. 'There have been calls to abolish COV, as well as calls not to publish it,' an HDB spokesman said. 'MND (Ministry of National Development) and HDB are considering the pros and cons of the different options.'
The resale flat market has been going strong on the back of robust demand and short supply, industry watchers said. There were 6,581 resale transactions in Q2, up by about 6 per cent from Q1. Q2's price growth also exceeded the official flash estimate of a 2.9 per cent increase.
C&H Properties key executive officer Albert Lu noted that buyers who initially adopted a wait-and-see attitude after the government introduced tightening measures for the property market had returned to the scene, after they noticed that resale flat prices had not gone down. 'It's pent-up demand,' he said.
Meanwhile, many owners have become reluctant to sell their flats, said ERA Realty Network key executive officer Eugene Lim. One reason he cited was this: Rising private property prices have led some HDB dwellers to postpone their upgrading plans.
While the number of resale transactions did go up in Q2, it is still smaller than volumes seen in the past, at times around 8,000 transactions, he said.
The buoyant market had industry watchers predicting a sharp rise in the median COV across all resale transactions. PropNex found from its own data that the overall median COV was $32,000 in Q2, and the firm's CEO Mohamed Ismail believes it could rise in Q3 'before plateauing in the beginning of next year'.
HDB's median COV for all resale transactions was only $21,000 in Q1. It did not release a Q2 figure for comparison, though it continued to publish median COVs across different towns and flat types.
Median COVs in several towns increased in Q2. For instance, at Tampines, the median COV for five-room flats was $42,000 but in Q1, it was $25,000. At Jurong West, the median COV for executive flats was $39,000, up from $20,000 in Q1.
'The meaningful data are those by location and flat type. The overall data is dependent on the mix of flats transacted which vary from quarter to quarter, and hence not as relevant,' the HDB spokesman said.
Views were mixed over the decision to not publish the median COV for all resale transactions. ERA's Mr Lim supported the move, saying that many buyers and sellers have been basing discussions on the COV rather than the overall price. 'This may be the first step to turning the focus of negotiations back to the resale price,' he said.
But C&H's Mr Lu preferred to have the overall median COV figure made public, 'so that people will know what is actually going on in the market'.
There were other pieces of information which HDB did not release in Q2, such as the proportion of resale cases transacting above valuation and the overall median resale price for each flat type.
HDB yesterday noted an 'imbalance in supply and demand for resale flats' and said it is increasing the supply of new flats to provide eligible buyers with more options.
It plans to launch 25,000 build-to-order flats this year and has released about 15,500 so far. The remaining 9,500 new flats will be rolled out over two launches by year-end. There will also be a sale of balance flats exercise.
In the HDB rental market, the number of subletting transactions rose by some 13 per cent over the quarter to 7,177 in Q2.