Written answer by Ministry of National Development on current proportion of HDB resale transactions with cash-over-valuation by town and flat type in year-to-date

Nov 28, 2022

Mr Chua Kheng Wee Louis: To ask the Minister for National Development

(a) what is the current proportion of HDB resale transactions with Cash-Over-Valuation (COV); and
(b) what is the (i) 25th percentile (ii) average (iii) median and (iv) 75th percentile COV by town and flat type in the year-to-date.

Answer:

HDB resale flat transactions are conducted on a "willing-buyer-willing-seller" basis, with prices negotiated and mutually agreed upon between flat sellers and buyers.  The transacted prices of resale flats for the last 12 months are published on the HDB InfoWEB to guide potential sellers and buyers.

2.       After a resale price has been agreed upon, the flat sellers will grant an Option to Purchase (OTP) to the buyers. If the buyers wish to use their CPF savings or a housing loan to pay for the flat purchase, they will need to make a “Request for Value” to HDB. Cash-Over-Valuation (COV) arises when the resale price is higher than the market valuation of the flat, as the difference can only be paid in cash. Otherwise, there is no COV. Buyers can decide whether to exercise the OTP for the resale transaction depending on the valuation and any COV payable. Should they choose not to proceed with the transaction, buyers will forgo the option fee of between $1 and $1,000 paid to the seller.

3.       Around 1 in 4 resale flat buyers in 2022 (up to October) paid a COV. This is an increase from 2020 where around 1 in 5 resale flat buyers paid a COV, but an improvement from 2021 where around 1 in 3 paid a COV. The majority of buyers did not have to pay any COV. For each flat type, the 25th percentile and median COV across all towns was $0. The 75th percentile COV ranged from $5,000 to $38,000.

Issued by:    Ministry of National Development

Date         :   28 Nov 2022