By Olivia Siong | Posted: 14 January 2013 2138 hrs

SINGAPORE

Some housing analysts said the property market has slowed since the government announced its seventh round of cooling measures on Friday.

One analyst said the Cash-Over-Valuation (COV) for larger public housing resale flats could come down by about 30 per cent in coming weeks.

The median cash premium for a five-room or executive flat has hovered around S$40,000 to S$50,000. But with tighter Mortgage Servicing Ratio, observers said this may change.

Mohamed Ismail, CEO of PropNex, said: “The amount of loan that one could secure will be reduced by as much as 25 per cent for a financial institution funding. With this, that means people who are buying a bigger HDB flat, will have to top up with CPF and cash, and over and above if you want to pay a very high COV.

“It will be a double exposure in your cash up front and that’s where we are expecting the market of COV to cool-off, particularly for the five-room and executive flats, to the tune of 25 to 30 per cent in coming weeks.”

Analysts added that the attitudes of sellers may also be shifting, as they realise buyers are more cash strapped.

Eugene Lim, key executive officer at ERA Realty Network, said: “Before the announcement was a market that was moving upwards, so in the market like this, sellers tend to set their prices very high and in fact they’re not very negotiable when it come to prices.

“After the policy announcement, more sellers have become more realistic. Gradually, I think previously where they would outright reject the buyer — any interested buyer who is showing interest in the property, now they will be prepared to consider and negotiate the offer.”

But there have been some concerns on the ground. Among the new measures announced on Friday, Singaporeans will now have to pay a seven per cent Additional Buyer’s Stamp Duty for their second property, and analysts said this could lead to some transitional issues in the future.

Observers said some home buyers may choose to sell off their first property before buying their second property to avoid paying the stamp duty. This poses an interim problem for those currently living in HDB flats.

Mr Ismail said: “The real concern where ABSD is concerned, is the practical, ground constraints of genuine upgraders being left ‘homeless’ for a short period of time. The concern will be where the seller of these houses who are upgrading enter into a bilateral arrangement or extension so as to facilitate and all these things are deemed illegal in the eyes of the HDB.”

Mr Lim said: “They have to really plan the move to cater into, for example, they sell their home and request for a longer completion time, so they can complete the sale of the home that they just purchased. So we may see this trend of having longer completion times happening in the market.”

This would not be an issue for those in the private housing market. Sellers could reach an agreement with their buyer to rent the property until the new unit is ready.

-CNA/ac