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    Feb 07, 2014

    Resale flats in Bishan feel the chill

    IT IS home to two of the most expensive resale flats sold in Singapore.

    But, for the first time in five years, buyers have refused to pay extra for Bishan flats.

    Overall median cash premiums for Housing Board resale transactions in Bishan have slid into negative territory, according to flash estimates released by the Singapore Real Estate Exchange (SRX) yesterday.

    This came as the median cash-over-valuation (COV) for HDB flats overall continued to tumble last month, registering a new low of $3,000 since October 2006.

    This is down from the median COV of $5,000 in the month before.

    The report found that more than a quarter of the 28 HDB towns here logged a zero or negative overall median COV last month, led by Sengkang and Punggol. Other towns that recorded zero median COVs included Geylang, Jurong West, Sembawang, Woodlands, Yishun and Bishan.

    Bishan recorded a zero median COV for the first time since February 2009.

    Mr Jeremy Lee - co-founder of StreetSine, the company behind SRX - told MyPaper that the median COV for the area last year, at $45,000, was a "rosy" figure, compared to that of other HDB towns. A 1,750 sq ft executive maisonette in Bishan changed hands at $1.01 million last year.

    In December, it was reported online that another executive maisonette in Bishan Street 13 was sold for a record-breaking $1.05 million.

    But the latest figures, explained Mr Lee, show that, "despite the popularity of the area, the prices in Bishan, as a whole, are not immune to the softening trend in HDB prices".

    Record deals tend to be "one-offs that exaggerate the town's actual pricing trends", he added.

    Mr Alan Cheong, senior director of research and consultancy at Savills Singapore, pointed out that the additional housing curbs for newly minted Singapore permanent residents (PRs) may also have reduced demand for homes in the area, contributing to a markdown in the COVs.

    Singapore PRs have to wait three years after obtaining their status before they can buy an HDB resale flat.

    "Bishan has always been a popular area for PRs, who have been paying top dollar for a home in the area," noted Mr Cheong.

    Still, PropNex Realty chief executive Mohamed Ismail said that the January COV figures could have come with transactions for homes "located on the lower floors, or with minimal or no renovations".

    "There are still many units (in Bishan) that command prices above valuation, especially the executive maisonettes that offer patio space," he said.

    On the whole, Mr Darren Ng, senior division director of Dennis Wee Group, expects median COVs for HDB homes to dip further, at least until the end of the year.

    Mr Nicholas Mak, director of research and consultancy at SLP International, said: "Get used to the new reality - that low or zero COV will become increasingly common."