Oral answer by Ministry of National Development on proportion of resale HDB flat buyers paid Cash-Over-Valuation (COV) since 14 February 2023, when enhancements to the CPF Housing Grant were announced

Mar 6, 2024

Question No: 5834

Question by: Mr Xie Yao Quan

To ask the Minister for National Development (a) what proportion of resale HDB flat buyers paid Cash-Over-Valuation (COV) since 14 February 2023, when enhancements to the CPF Housing Grant were announced; (b) what is the mean and median COVs since 14 February 2023; and (c) whether the Ministry will consider making the CPF Housing Grant conditional on COVs to keep COVs prudent and sustainable.

Answer:

          On 14 Feb 2023, DPM Lawrence Wong announced that the CPF Housing Grant would be increased to provide more support for First-Timer Singaporeans seeking a resale flat. Eligible First-Timer families buying a 2-room to 4-room resale flat can receive $80,000 in CPF Housing Grant, up from $50,000 previously, while those buying a 5-room or larger resale flat can receive $50,000 in CPF Housing Grant, up from $40,000 previously. Eligible First-Timer singles buying a 2-room to 4-room resale flat can similarly receive an increased CPF Housing Grant of $40,000, up from $25,000 previously; while those buying a 5-room resale flat can receive $25,000, up from $20,000 previously.

2.       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. Cash-Over-Valuation (COV) arises when the resale price is higher than the market valuation of the flat.

3.       After the CPF Housing Grant was enhanced in Feb 2023, about 18% resale flat buyers paid COV. This is a noticeable reduction from about 29% in 2022, and 36% in 2021. The majority of resale flat buyers did not have to pay any COV, and the median COV across all buyers has remained at $0.

4.       The CPF Housing Grant is targeted at First-Timer families who meet income criteria and other eligibility conditions, limiting its impact on the overall resale market. COV restrictions would be challenging to enforce, as buyers and sellers could collude to circumvent the restrictions.

5.       The Government will continue to keep a close watch on the affordability of flats on the resale market.