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Explanation of COV wanted

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revhappy
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Postby revhappy » Tue, 13 Sep 2011 8:58 pm

I think COV per se is not wrong. But since the term has been coined and property websites display COV figure explicitly and also the gahmen publishes the average COV figure, it sort of becomes the norm to have a COV of around 30k-50k and at a later point the COV itself gets fed into the valuation. Then people forget that the COV has already gotten into the valuation and people start asking for more COV. So that cycle goes on and on.

I believe they have stopped publishing average COV figures now. In any case with the impending recession and an oversupply prices are coming down sooner or later.

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sundaymorningstaple
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Postby sundaymorningstaple » Tue, 13 Sep 2011 9:48 pm

revhappy wrote:I think COV per se is not wrong. But since the term has been coined and property websites display COV figure explicitly and also the gahmen publishes the average COV figure, it sort of becomes the norm to have a COV of around 30k-50k and at a later point the COV itself gets fed into the valuation. Then people forget that the COV has already gotten into the valuation and people start asking for more COV. So that cycle goes on and on.

I believe they have stopped publishing average COV figures now. In any case with the impending recession and an oversupply prices are coming down sooner or later.


perxactly!

Valuations are based on similar units in a similar area that have been recently sold, say over the past quarter or 2 quarters. As they have been sold for more that their valuations, the excess for them is COV. However, before you sell your property in the same general location, you would have a valuation done. The Valuers would look up the recently transacted properties and take other things like floor, view, general condition, etc. and give their current valuation. So, it's good to have a valuation done every couple of years (if you are looking to turn it over - otherwise, don't bother) You can always look at the resale transaction over the previous 12 months on the HDB site to give you a general valuation for similar units.


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