PRICES of public housing resale flats are still going up despite the falling cash premiums demanded by sellers.
Fresh data obtained by The Straits Times from three major property agencies showed overall median prices climbing across almost all flat types in November, compared to HDB's latest third quarter statistics.
This is despite measures introduced by the Government on Aug 30 to cool Singapore's red-hot public housing market, which tightened financing and restricted home ownership.
When contacted, the Housing Board (HDB) said that it was unable to comment further on the resale prices ahead of the release of the flash estimates on Jan 3.
'However, we do see falling COV, resale volume, and a gradual slowing down of price growth,' it said.
It added: 'We are unable to speculate how HDB resale flat prices will move in the next quarter as other than demand and supply, they are also affected by various factors such as economic conditions and market sentiments.'
It explained that prices of resale flats depend on 'the prevailing market conditions, supply and demand, and the individual needs of the buyers and sellers'.
'Valuers (of resale flats) use the comparison method which typically uses past recent transactions which provides the best evidence of market values. Hence, valuation inevitably lags behind the prevailing market,' it said.
Analysts explained that final resale prices are largely determined by valuations of HDB resale flats, which are still climbing. These valuations are based on past transactions for which caveats have been lodged. They lag behind current prices because they are deals typically struck one to two months ago.
The still-rising prices spell a further hike - and a fresh record - in the HDB resale price index for the fourth quarter of 2010.
This is despite cash over valuation (COV) premiums falling since the announcement of the Aug 30 measures.
COV refers to the amount a buyer pays over and above the valuation of an HDB resale flat, and is payable only in cash.
National Development Minister Mah Bow Tan had previously revealed that median COV figures had dropped from $30,000 in the third quarter to about $22,000 in November.
While HDB figures showed the median resale price for four-roomers for the three months ending in September at $378,000, median prices at the agencies ranged from $383,000 to $400,800 in November.
For executive flats, median prices for November were in the range of $550,000 to $563,000 - up from HDB's figure of $530,000 in the third quarter.
An example of rising prices but falling COVs can be seen in the sale of a low-floor four-room flat in Tampines West in December for $380,000, including $8,000 COV. A similar flat in the same area sold for $340,000 in September, including $20,000 COV.
The three agencies The Straits Times polled - HSR Property Group, PropNex, and Dennis Wee Group (DWG) - make up more than half the HDB resale market share.
Mr Colin Tan, research and consultancy director of Chesterton Suntec International, is not surprised by the climbing prices. 'The question is how fast it is going up,' he said. If the estimates show the price increase for the fourth quarter to be less than 2.5 per cent, that means it is stabilising, he added.
On what this means for the hot button issue of affordability of housing, Mr Tan noted that the biggest concern for many first-time home buyers would be the level of COV, as this can only be paid in cash.
The absolute amount of a flat's price may be higher, but if COV falls, it could be more 'affordable' for such buyers in that sense, he said.
However, higher flat prices and lower COVs will logically mean buyers will be saddled with bigger loans.
Analysts also point to another issue propping up resale flat prices - there are not as many flats on the market.
PropNex chief executive Mohamed Ismail said many sellers have decided to take their units off given the softening market.
The pool of buyers has also shrunk after the cooling measures made it more difficult for permanent residents (PRs) and private property owners to buy HDB resale flats.
He added that, based on December's sales for the firm, prices seemed to be stabilising with only marginal increases.
Analysts are now saying that the resale price index will more likely stabilise and move less than 1 or 2 per cent upwards or downwards in the coming quarters.