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Explain COV

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PNGMK
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Postby PNGMK » Fri, 07 Mar 2014 11:29 am

bro75 wrote:Why did we pay the COV? which I did when I bought my HDB. Because, paying the COV allowed me to buy the flat I want during that time. I could have insisted in paying less, but I will not be able to get the flat. During that time (2010), it was a good decision as both rentals and HDB prices shot up afterwards. As of this time, it is still a good decision versus renting. I believe COV more or less reflects the true market value rather than the official valuation which lags the market.


In my country it's 'gazumping'. You offer the RE agent a figure above the previous offer to get the property. Illegal in some states.

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Postby bro75 » Fri, 07 Mar 2014 1:17 pm

I assumed "gazzumping" is illegal in some areas to stabilize the housing market? Or is there any other reason? Even then , "gazzumping" is not what we did here. The seller told us the initial selling price with COV but we were able to negotiate it lower but still with COV (0 COV was impossible at that time maybe). We had no idea of what other people offered for the place.

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Postby taxico » Sat, 08 Mar 2014 11:17 am

bro75 wrote:Why did we pay the COV? which I did when I bought my HDB. Because, paying the COV allowed me to buy the flat I want during that time. I could have insisted in paying less, but I will not be able to get the flat. During that time (2010), it was a good decision as both rentals and HDB prices shot up afterwards. As of this time, it is still a good decision versus renting. I believe COV more or less reflects the true market value rather than the official valuation which lags the market.


wouldn't the true measure of the COV's "worth" be apparent only after you've sold your flat? (as opposed to the perceived prices in flat owners' heads)
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Postby bro75 » Sat, 08 Mar 2014 3:00 pm

taxico wrote:
bro75 wrote:Why did we pay the COV? which I did when I bought my HDB. Because, paying the COV allowed me to buy the flat I want during that time. I could have insisted in paying less, but I will not be able to get the flat. During that time (2010), it was a good decision as both rentals and HDB prices shot up afterwards. As of this time, it is still a good decision versus renting. I believe COV more or less reflects the true market value rather than the official valuation which lags the market.


wouldn't the true measure of the COV's "worth" be apparent only after you've sold your flat? (as opposed to the perceived prices in flat owners' heads)


Do you mean whether the COV is worth paying for at that time? You are correct but since we cannot predict the future, we have to make a decision based on conditions at that time. At the time we bought, MOP for PRs is only one year and you do not need to sell your private property. PRs can also buy immediately after being approved. Interest rates were low and there were fewer loan restrictions. Rents were starting to rise again after falling on 2009. We also looked at other properties and got quoted higher COVs than what we ultimately settled for.
If I sold my flat now (based on last transaction values at my area), I would have netted some amount, so it is worth it now but who knows down the road. For now, we feel that what we paid for was worth it. I know the situation can change as we saw in other parts of the world.

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Postby Sergei82 » Sat, 08 Mar 2014 3:16 pm

The situation has already changed. Its not worth to buy flats here anymore. Unless you're a citizen, but even if you are, it is still not worth it as an investment.

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PNGMK
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Postby PNGMK » Sat, 08 Mar 2014 9:08 pm

bro75 wrote:I assumed "gazzumping" is illegal in some areas to stabilize the housing market? Or is there any other reason? Even then , "gazzumping" is not what we did here. The seller told us the initial selling price with COV but we were able to negotiate it lower but still with COV (0 COV was impossible at that time maybe). We had no idea of what other people offered for the place.


But you could have been gazumped by someone offering slightly above your COV offer.

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PNGMK
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Postby PNGMK » Sat, 08 Mar 2014 9:09 pm

Sergei82 wrote:The situation has already changed. Its not worth to buy flats here anymore. Unless you're a citizen, but even if you are, it is still not worth it as an investment.


In all fairness it is called the "Housing Development Board"; not the "Housing Investment Board" and the HDB was established to do that; provide housing. The pushback from SC has been over people trying to use HDB as a speculative platform.

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Postby Sergei82 » Sat, 08 Mar 2014 9:14 pm

PNGMK wrote:
Sergei82 wrote:The situation has already changed. Its not worth to buy flats here anymore. Unless you're a citizen, but even if you are, it is still not worth it as an investment.


In all fairness it is called the "Housing Development Board"; not the "Housing Investment Board" and the HDB was established to do that; provide housing. The pushback from SC has been over people trying to use HDB as a speculative platform.

I agree, they chose the wrong name. :)

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Postby Beeroclock » Sat, 08 Mar 2014 9:52 pm

To give credit where due I think govt doing a good job on the cooling measures. Has really dampened the speculation and made it harder for people to overextend. Ok it's been a major bummer for agents, and owners maybe annoyed too. But will prevent a lot if problems when rates inevitably have to increase.

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Postby singapore eagle » Mon, 10 Mar 2014 7:46 pm

So COV is no more.

All that effort to get my head around the idea for nothing!


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