HDB Resale Transactions with Cash-over-valuation by Town and Flat Type

Mr Chua Kheng Wee Louis asked 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.

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.

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.

Around one in four resale flat buyers in 2022, up to October, paid a COV. This is an increase from 2020 where around one in five resale flat buyers paid a COV, but an improvement from 2021 where around one in three 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.