The Straits Times reported yesterday that the median Cash-over-valuation (COV) for HDB flats hit a new high in the fourth quarter of 2009. COVs are cash premiums that a buyer has to pay over the bank’s valuation of the flat. Why do we have to pay a COV, you might ask.
It’s about time we found out how the property market in Singapore performed last year. The Urban Redevelopment Authority (URA) recently released the flash estimates of the price index of private residential property for the 4th quarter of 2009 (flash estimates only ah, don’t get too excited yet). Confirmed figures usually come out 4 weeks after this release.
The prices of private residential property rose from 154.3 in the 3rd quarter to 165.5 points in the 4th quarter of 2009. Note that the index is pegged to the 4th quarter of 1998, meaning 1998 = 100%. Therefore, an index of 165.5 means that prices now are 65.5% more than in 1998. But usually it’s more meaningful to compare the results from consecutive periods.