Cash-Over-Valuation (COV) Shows Upward Trend

by • November 30, 2012 • Property Market NewsComments (0)2736

Cash-Over-Valuation (COV) Shows Upward Trend


Cash-Over-Valuation (COV) is defined as “the difference between the resale price and the market value of the flat” (HDB) that is paid by the buyer upfront. It is common for most HDB resale transactions. However, if the resale price is “at or below the market valuation of the flat, there is no need for buyer to pay any COV”. COV was legalised because of illegal ‘under counter cash payment’, but there have been calls to have it scrapped as some argue that it ratchets up resale prices. This has been refuted by HDB (HDB Speaks).

Reports show that the median COV finally showed an uptick, after falling for three consecutive quarters. The Singapore Real Estate Report (SRX) for Q3 2012 reveals a 15 percent quarter-to-quarter increase, with the median COV for this quarter standing at $30,000 up from the second quarter of $26,000. As can be seen from Table 1 and Table 2, there has been a quarter-to-quarter decline across all four housing types from 4Q 2011 to 2Q 2012, with the exception of 5-room and executive flats in 2Q 2012.

Table 1: Overall (Average for the 26 Districts) Median COV





3Q 2011





4Q 2011





1Q 2012





2Q 2012





3Q 2012





Source: Compiled using data from HDB Median Cash-Over-Valuation (COV)

Table 2: Quarter-to-Quarter Percentage Change in Median COV





4Q 2011





1Q 2012





2Q 2012





3Q 2012





Source: Compiled using data from HDB Median Cash-Over-Valuation (COV)

We have to make do with this rudimentary estimation, as from July 2011 HDB no longer provides overall nationwide COV figures and “overall median COV figures for different housing estates and flat types” (Chin) – a practice it has been doing since 2Q 2007, but ceased when it realised it provides little informational value for house buyers and sellers. Instead, HDB now only makes available the median COV for each housing type in the different district.


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1. Chin, Daryl, “HDB to stop releasing overall nationwide COV figures”, The Straits Times 23 July 2011, Print

2. Wong Wei Han, “COV Prices Rise After 9-month Decline”, TODAY (Singapore) 6 October 2012, Print

3. HDB, “Median Cash-Over-Valuation (COV) by Town and Flat Type”, Web


4. HDB Speaks, “Why Can’t HDB Scrap the Practice of Paying Cash-Over-Valuation?” Web



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