Tag Archive | "cash-over-valuation"

Limited Resale Flat Supply speaks up

Limited Resale Flat Supply speaks up

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The opinions expressed in this article belong to Limited Resale Flat Supply solely, a thing that is becoming more real. No, seriously.

Limited Resale Flat Supply is real. Very real.

Hi everybody, my name is Limited Resale Flat Supply.

You must be wondering who the %&#@ am I, and why I even have the ability to write an article.

Don’t worry, I’m real. And not part of your imagination because you smoked something illegal. No, no.

I am what economists would call “a determining factor”.

Yes, I am not a typical person, like your mother or grandfather or mistress. However, I would still regard myself as a “proper thing”, albeit one that is a relatively voiceless thing in Singaporean society.

Kind of like the voiceless marginalised. But in my case, even more marginalised because you wouldn’t typically hear me speak on any regular day.

Not even on TOC.

Honestly, you can believe all you want that I don’t even exist because Limited Resale Flat Supply doesn’t even qualify as a noun.

But that doesn’t mean I’m not here.

I am. And I might be here to stay. For good. So let me explain.

Recently, you must have read in the news that resale flat prices keep going through the roof. (Haha, sorry about that housing pun… Anyways…)

Apparently, fewer people bought HDB resale flats between July and September this year. The number of resale transactions declined by 10 per cent to 5,903 deals in the third quarter – below the usual 6,000-a-month average.

However, the median cash-over-valuation (COV) – the cash premium on top of the bank valuation for the property – has risen to more than $30,000 for almost all flat types and estates.

Therefore, as these bunch of fewer people were still prepared to pay more, total transactions went down but prices of resale flats still went up. Naturally.

Or so the argument goes in The Straits Times front page story on Oct. 29.

But I can tell you: This argument is bunk!

Look, the real answer lies in the fact that there is a historically low supply of five-year-old flats eligible for resale now.

There are fewer such flats because HDB’s building programme slowed dramatically about eight years ago due to the economic and Sars crises, as well as the availability of tens of thousands of unsold flats then.

And no one could predict what was to happen in just eight short years later. The few flats that were available then matured enough to be resold and our population quadrupled in that same period of time. (I’m exaggerating, but sure feels like it, doesn’t it?)

Not that ST never reported this fact. They did. Except they cut the story in half on the front page, with this fact put inside the second half of the story in page six! So sneaky!

And I wonder why!

And you know what’s the factor that makes me, Limited Resale Flat Supply, speak up?

I have gotten bigger and more prominent! I’m in a persistent state of arousal! From now until forevermore!

You remember the rules introduced last August to restrict HDB flat ownership? Such as requiring private property owners who buy HDB resale flats to dispose of their private property within six months?

You think it’s damn smart to try to curb people from purchasing HDB flats for investment when they already own private property, right?


Those who are holding onto private property and HDB flats before the new rules kicked in, now don’t even want to let go!

They want to wait for the right time! When prices go up even higher! Because they now have a stake in controlling the resale flats market forces!

And I, Limited Resale Flat Supply, is becoming more and more powerful!

Also, think about bigger social issues: Permanent residents resorting to buying instead of renting, more singles on the prowl for a resale flat to call home because lesser Singaporeans are getting into marriage, and first-time home owners who can no longer wait for Build-To-Order flats that will only be done in three years’ time.

Three years’ time!

And you think raising the monthly income ceiling from $8,000 to $10,000 is going to help to make waiting three years attractive?

My constituency I represent, the Limited Resale Flat Supply group representation, is fortified and will no longer go unnoticed.

Although we might not be real, so to speak, our presence will hopefully encourage you to speak up for your own rights and champion your own causes and interests… until the next elections or something.

Until then, and since you might be intending on waiting for your BTO flat, why not watch Nyan Cat fly around carelessly?

This will commensurate with your feelings of hopelessness perfectly in the meantime.

Yours truly,
Limited Resale Flat Supply