Debated in Parliament on 6 Jul 2021.
Mr Gan Thiam Poh asked the Minister for National Development (a) in the past 18 months, how many HDB resale flats have been sold below valuation; and (b) how many have been sold with cash over valuation of (i) $10,000 or below in each district (ii) between $10,000 and $20,000 in each district (iii) between $20,000 and $30,000 in each district and (iv) above $30,000.
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 by 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.
Based on resale flat transactions registered from January 2020 to April 2021, less than one in four involved a COV. Of these, about six in 10 paid a COV of not more than $20,000 while four in 10 paid a COV of more than $20,000. The details of the COV paid for the resale transactions which involved a COV for the different regions in Singapore is in Table 1.
PAPERCUTS