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COV Singapore — What is Cash Over Valuation (COV) of a resale HDB flat

According to The Straits Times, 1 in 4 HDB resale flat buyers paid cash over valuation (COV) on their HDB resale flats in 2022.

We’ll explain COV in greater detail later, but it means they agreed to purchase their flats above market value (as determined by HDB). And as the word “cash” implies, any amount over HDB’s valuation has to be paid out of your pocket. Ick.

If you’re in the market for an HDB resale flat, then COV is something you want to avoid as much as possible. But how do you figure it out before committing to the purchase?

What does cash over valuation or COV mean?

First, let’s talk about what COV is and why it’s important to most people (unless you’re rich enough to buy the HDB flat in cash, lucky you).

HDB resale prices are negotiated on a “willing buyer, willing seller” basis. HDB does not step in to set prices or stop sellers from overcharging. But, HDB does have its own idea of how much each resale flat is worth and this will affect home financing in some cases.

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Let’s say you’ve found the flat of your dreams in Yishun. The seller quotes you S$600,000, and you’re pleased with the price.

After you pay S$1,000 for the Option to Purchase (OTP) and request the valuation report from HDB, it turns out that HDB values your dream home at S$550,000. Your COV is thus S$600,000 – S$550,000 = S$50,000.

If you proceed with the purchase, your home loan will be based on S$550,000 as the total amount. You’ll have to pay the S$50,000 COV in cash — and that’s on top of your downpayment.

Otherwise, you can back out of the deal and resume your HDB hunt. But you’ll forfeit the S$1,000 option fee.

To save yourself the heartache, here are 3 ways to gauge the COV of a resale HDB flat BEFORE you pay the option fee.

(As for the sellers, setting the asking price too high above the valuation runs the risk of buyers backing out of the deal, especially in a buyer’s market. So it’s good to price the flat closer to the market value.)

1. Check HDB resale transaction data

We’re not saying you need a Data Science degree to buy an HDB flat, but it’s good to do your own market research.

HDB’s resale transaction portal is good for when you’re just starting the search and only have an idea of which neighbourhood you want to stay in. Key in the “Flat Type” and “HDB Town” of your choice and look at the last 6 or 12 months’ transactions to get a sense of flat prices in the area.

HDB resale prices can vary hugely among similar-sized units in the same HDB town, though. A freshly-MOP-ed unit near the MRT station can fetch way higher prices than one in the outskirts of the ‘hood.

So once you can narrow things down to specific blocks on specific streets — i.e. using Street Name and Block No. — you can get much more accurate data.

Had you realised that the blocks around your dream home in for example, Yishun or Punggol, had units transacting at S$5XX,000 in the past year, then you can easily guess that its S$600,000 price tag might land you in a COV situation.

2. Check transaction history on 99.co listings

House-hunting on 99.co? Here’s how you can gauge potential COV on a listing you like. Simply take note of the property’s asking price, then scroll down to “Transaction history” and calculate the discrepancy.

Here’s an example of an HDB flat with an asking price of S$660,000

listing page
listing page

 

Scrolling down to the transaction history section shows us that recent transactions in this block were closer to around S$550,000.

transaction history
transaction history

 

 

This flat’s asking price of S$660,000 is S$60,000 more than the highest transacted price of S$600,000. So it’s quite likely to incur cash over valuation.

Do note that if the flat’s purchase price is fairly close to the existing transactions — let’s say a S$20,000 difference — HDB may accept this as the market value of the flat and you might avoid having to pay COV.

HDB flats for sale in Punggol and Yishun

See all listings

204A Punggol Field Photo
204A Punggol Field Photo

204A Punggol Field

Singapore 821204 · D19

3

2

1,183 sqft

$599,000

270C Punggol Field Photo
270C Punggol Field Photo

270C Punggol Field

Singapore 823270 · D19

3

2

1,603 sqft

$1,200,000

116 Edgefield Plains Photo
116 Edgefield Plains Photo

116 Edgefield Plains

Singapore 820116 · D19

3

2

1,205 sqft

$580,000

612A Punggol Drive Photo
612A Punggol Drive Photo

612A Punggol Drive

Singapore 821612 · D19

3

2

1,001 sqft

$628,888

619A Punggol Drive Photo
619A Punggol Drive Photo

619A Punggol Drive

Singapore 821619 · D19

3

2

1,001 sqft

$568,000

224B Sumang Lane Photo
224B Sumang Lane Photo

224B Sumang Lane

Singapore 822224 · D19

2

2

731 sqft

$480,000

316A Punggol Way Photo
316A Punggol Way Photo

316A Punggol Way

Singapore 821316 · D19

3

2

1,216 sqft

$800,000

128D Punggol Field Walk Photo
128D Punggol Field Walk Photo

128D Punggol Field Walk

Singapore 824128 · D19

3

2

1,183 sqft

$610,000

296 Punggol Central Photo
296 Punggol Central Photo

296 Punggol Central

Singapore 820296 · D19

3

2

1,183 sqft

$680,000

308B Punggol Walk Photo
308B Punggol Walk Photo

308B Punggol Walk

Singapore 822308 · D19

3

2

990 sqft

$555,000

190 Punggol Central Photo
190 Punggol Central Photo

190 Punggol Central

Singapore 820190 · D19

3

2

1,378 sqft

$699,999

173D Punggol Field Photo
173D Punggol Field Photo

173D Punggol Field

Singapore 824173 · D19

3

2

1,183 sqft

$550,000

195A Punggol Road Photo
195A Punggol Road Photo

195A Punggol Road

Singapore 821195 · D19

3

2

968 sqft

$550,000

104B Edgefield Plains Photo
104B Edgefield Plains Photo

104B Edgefield Plains

Singapore 822104 · D19

3

2

968 sqft

$500,000

662A Edgedale Plains Photo
662A Edgedale Plains Photo

662A Edgedale Plains

Singapore 821662 · D19

2

2

721 sqft

$470,000

314A Punggol Way Photo
314A Punggol Way Photo

314A Punggol Way

Singapore 821314 · D19

3

2

1,216 sqft

$850,000

224C Sumang Lane Photo
224C Sumang Lane Photo

224C Sumang Lane

Singapore 823224 · D19

3

2

1,000 sqft

$658,888

308C Punggol Walk Photo
308C Punggol Walk Photo

308C Punggol Walk

Singapore 823308 · D19

2

2

721 sqft

$488,000

661C Edgedale Plains Photo
661C Edgedale Plains Photo

661C Edgedale Plains

Singapore 823661 · D19

2

2

1,206 sqft

$650,000

308B Punggol Walk Photo
308B Punggol Walk Photo

308B Punggol Walk

Singapore 822308 · D19

3

3

1,206 sqft

$848,000

658B Punggol East Photo
658B Punggol East Photo

658B Punggol East

Singapore 822658 · D19

3

2

1,216 sqft

$800,000

658C Punggol East Photo
658C Punggol East Photo

658C Punggol East

Singapore 823658 · D19

3

2

1,001 sqft

$620,000

231B Sumang Lane Photo
231B Sumang Lane Photo

231B Sumang Lane

Singapore 822231 · D19

3

2

1,216 sqft

$800,000

102C Punggol Field Photo
102C Punggol Field Photo

102C Punggol Field

Singapore 823102 · D19

3

2

1,184 sqft

$638,000

274A Punggol Place Photo
274A Punggol Place Photo

274A Punggol Place

Singapore 821274 · D19

3

2

1,001 sqft

$699,999

224B Sumang Lane Photo
224B Sumang Lane Photo

224B Sumang Lane

Singapore 822224 · D19

2

2

731 sqft

$440,000

213A Punggol Walk Photo
213A Punggol Walk Photo

213A Punggol Walk

Singapore 821213 · D19

4

2

1,216 sqft

$660,000

683B Edgedale Plains Photo
683B Edgedale Plains Photo

683B Edgedale Plains

Singapore 822683 · D19

3

2

1,001 sqft

$660,000

203B Punggol Field Photo
203B Punggol Field Photo

203B Punggol Field

Singapore 822203 · D19

3

2

1,184 sqft

$585,000

635C Punggol Drive Photo
635C Punggol Drive Photo

635C Punggol Drive

Singapore 823635 · D19

3

2

979 sqft

$550,000

301C Punggol Central Photo
301C Punggol Central Photo

301C Punggol Central

Singapore 823301 · D19

3

2

1,011 sqft

$600,000

623C Punggol Central Photo
623C Punggol Central Photo

623C Punggol Central

Singapore 823623 · D19

3

2

1,012 sqft

$580,000

682C Edgedale Plains Photo
682C Edgedale Plains Photo

682C Edgedale Plains

Singapore 823682 · D19

3

2

1,001 sqft

$628,000

308A Punggol Walk Photo
308A Punggol Walk Photo

308A Punggol Walk

Singapore 821308 · D19

3

2

1,205 sqft

$788,000

169C Punggol Field Photo
169C Punggol Field Photo

169C Punggol Field

Singapore 823169 · D19

3

2

1,001 sqft

$596,000

See all Punggol  >

See all listings

676C Yishun Ring Road Photo
676C Yishun Ring Road Photo

676C Yishun Ring Road

Singapore 763676 · D27

3

2

1,000 sqft

$554,800

776 Yishun Avenue 2 Photo
776 Yishun Avenue 2 Photo

776 Yishun Avenue 2

Singapore 760776 · D27

3

2

1,291 sqft

$598,000

511A Yishun Street 51 Photo
511A Yishun Street 51 Photo

511A Yishun Street 51

Singapore 761511 · D27

3

2

1,001 sqft

$568,000

210 Yishun Street 21 Photo
210 Yishun Street 21 Photo

210 Yishun Street 21

Singapore 760210 · D27

2

2

721 sqft

$408,000

734 Yishun Avenue 5 Photo
734 Yishun Avenue 5 Photo

734 Yishun Avenue 5

Singapore 760734 · D27

2

2

721 sqft

$390,000

870 Yishun Street 81 Photo
870 Yishun Street 81 Photo

870 Yishun Street 81

Singapore 760870 · D27

3

2

1,119 sqft

$520,000

426A Yishun Avenue 11 Photo
426A Yishun Avenue 11 Photo

426A Yishun Avenue 11

Singapore 761426 · D27

3

2

1,206 sqft

$660,000

302 Yishun Central Photo
302 Yishun Central Photo

302 Yishun Central

Singapore 760302 · D27

4

2

1,119 sqft

$520,000

673B Yishun Avenue 4 Photo
673B Yishun Avenue 4 Photo

673B Yishun Avenue 4

Singapore 762673 · D27

3

2

1,216 sqft

$717,700

785 Yishun Avenue 2 Photo
785 Yishun Avenue 2 Photo

785 Yishun Avenue 2

Singapore 760785 · D27

3

2

121 sqft

$628,000

665 Yishun Avenue 4 Photo
665 Yishun Avenue 4 Photo

665 Yishun Avenue 4

Singapore 760665 · D27

4

3

1,765 sqft

$1,200,000

502D Yishun Street 51 Photo
502D Yishun Street 51 Photo

502D Yishun Street 51

Singapore 764502 · D27

3

2

1,205 sqft

$725,000

799 Yishun Ring Road Photo
799 Yishun Ring Road Photo

799 Yishun Ring Road

Singapore 760799 · D27

3

2

1,313 sqft

$698,000

661 Yishun Avenue 4 Photo
661 Yishun Avenue 4 Photo

661 Yishun Avenue 4

Singapore 760661 · D27

3

2

979 sqft

$475,000

733 Yishun Avenue 5 Photo
733 Yishun Avenue 5 Photo

733 Yishun Avenue 5

Singapore 760733 · D27

4

2

1,323 sqft

$685,000

394 Yishun Avenue 6 Photo
394 Yishun Avenue 6 Photo

394 Yishun Avenue 6

Singapore 760394 · D27

2

2

786 sqft

$385,000

710 Yishun Avenue 5 Photo
710 Yishun Avenue 5 Photo

710 Yishun Avenue 5

Singapore 760710 · D27

2

2

731 sqft

$365,000

612 Yishun Street 61 Photo
612 Yishun Street 61 Photo

612 Yishun Street 61

Singapore 760612 · D27

3

2

904 sqft

$550,000

387 Yishun Ring Road Photo
387 Yishun Ring Road Photo

387 Yishun Ring Road

Singapore 760387 · D27

4

2

1,528 sqft

$850,000

504D Yishun Street 51 Photo
504D Yishun Street 51 Photo

504D Yishun Street 51

Singapore 764504 · D27

3

2

1,001 sqft

$678,000

501B Yishun Street 51 Photo
501B Yishun Street 51 Photo

501B Yishun Street 51

Singapore 762501 · D27

3

2

1,206 sqft

$699,999

502B Yishun Street 51 Photo
502B Yishun Street 51 Photo

502B Yishun Street 51

Singapore 762502 · D27

3

2

1,206 sqft

$715,000

794 Yishun Ring Road Photo
794 Yishun Ring Road Photo

794 Yishun Ring Road

Singapore 760794 · D27

3

2

1,302 sqft

$630,000

663 Yishun Avenue 4 Photo
663 Yishun Avenue 4 Photo

663 Yishun Avenue 4

Singapore 760663 · D27

4

2

1,302 sqft

$650,000

406 Yishun Avenue 6 Photo
406 Yishun Avenue 6 Photo

406 Yishun Avenue 6

Singapore 760406 · D27

4

2

1,528 sqft

$780,000

333A Yishun Street 31 Photo
333A Yishun Street 31 Photo

333A Yishun Street 31

Singapore 761333 · D27

4

2

1,205 sqft

$620,000

502B Yishun Street 51 Photo
502B Yishun Street 51 Photo

502B Yishun Street 51

Singapore 762502 · D27

3

2

990 sqft

$530,000

502B Yishun Street 51 Photo
502B Yishun Street 51 Photo

502B Yishun Street 51

Singapore 762502 · D27

3

2

990 sqft

$538,000

245 Yishun Avenue 9 Photo
245 Yishun Avenue 9 Photo

245 Yishun Avenue 9

Singapore 760245 · D27

3

2

904 sqft

$435,000

666 Yishun Avenue 4 Photo
666 Yishun Avenue 4 Photo

666 Yishun Avenue 4

Singapore 760666 · D27

5

3

1,926 sqft

$1,299,999

778 Yishun Avenue 2 Photo
778 Yishun Avenue 2 Photo

778 Yishun Avenue 2

Singapore 760778 · D27

3

2

1,119 sqft

$498,000

785 Yishun Avenue 2 Photo
785 Yishun Avenue 2 Photo

785 Yishun Avenue 2

Singapore 760785 · D27

3

2

1,119 sqft

$519,000

778 Yishun Avenue 2 Photo
778 Yishun Avenue 2 Photo

778 Yishun Avenue 2

Singapore 760778 · D27

3

2

1,119 sqft

$498,000

837 Yishun Street 81 Photo
837 Yishun Street 81 Photo

837 Yishun Street 81

Singapore 760837 · D27

4

3

1,572 sqft

$890,000

217 Yishun Street 21 Photo
217 Yishun Street 21 Photo

217 Yishun Street 21

Singapore 760217 · D27

bedroom
bedroom

3

bathroom
bathroom

2

1,000 sqft

$600,000

See all Yishun  >

 

3. Use 99.co’s Property Value Tool

Here’s a sneaky little tip: you can use a free property valuation tool like 99.co’s Property Value Tool to figure out the market rate of that HDB resale flat you’re eyeing.

First, key in the address and unit number of the flat you’re looking at.

After clicking on “Calculate my property value”, you’ll get prompted to log in to see the full results. My search garnered the following result:

See that S$518,000 Est. Sale Value in the top right corner? 99.co crunches data from HDB, URA, and other property agencies to get a reasonable gauge of the market value of the flat. If the place you’re looking at exceeds this benchmark significantly, then it’s likely to incur COV.

Of course, 99.co’s tool is no substitute for an HDB valuation. Paying the option fee and triggering a valuation request is the ONLY way to know for sure what the market value of the resale flat is. But hey, at least it won’t cost you S$1,000.

So before you commit to an HDB flat purchase, it’s a no-brainer to run it through 99.co’s property value tool first.

What if you can’t avoid cash over valuation?

Right now, the HDB resale market is a sellers’ market. As a prospective buyer, you’ll be competing with hordes of house-hungry Singaporeans who cannot wait for a BTO.

If you’re eyeing areas with high demand and a limited supply of flats, you should be mentally and financially prepared to fork out a COV. With that in mind, what you want is to minimise cash over valuation so that you don’t burn a massive hole in your bank account.

For a start, use the 99.co property listing portal to search for more options in your dream home’s vicinity. Because HDB resale pricing varies with personal circumstances, you might snag a cheaper unit if the sellers are motivated to move out (e.g. to upgrade to a condo).

And now that you know the market rates in the area, you can move fast if you spot a good deal.

But what if you still have your heart set on your overpriced dream home? Then use all your newly-acquired intel to negotiate a lower price on that resale flat. Yes, it may be a sellers’ market but as long as the flat hasn’t been sold yet, there’s still a chance.

How much COV would you be willing to pay? Let us know in the comments section below.

If you found this article helpful, 99.co recommends checking out How to estimate your property’s value like a pro with 99.co’s Property Value Tool and Property agent commission in Singapore: How much should I pay?

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