After falling for two quarters, cash premiums paid for Housing Board (HDB) resale flats are on the rise again.
Fresh data obtained by The Sunday Times from real estate agencies shows the median premium, or cash over valuation (COV), paid in the April to June period has risen to about $30,000.
This is almost 50 per cent higher than the $21,000 median COV registered for the first quarter.
Last week's figures reverse the trend of COVs falling after the Government moved last August to cool the housing market by restricting financing and tightening home ownership rules.
With sustained high demand for homes coming up against tight supply, the median COV is now close to the official record of $30,000 logged in the third quarter of last year.
COV is the amount a buyer pays over and above the valuation of an HDB resale flat. Because it must be paid in cash, it has a significant impact on affordability, and it is often used as an indicator of demand in the market.
The new figures were sourced from three of Singapore's biggest property agencies - PropNex, ERA Asia-Pacific and the Dennis Wee Group (DWG) - which together account for about two-thirds of HDB resale market sales.
Spokesmen at smaller agencies - such as C&H Properties' key executive officer Albert Lu - said their data also shows an increase of median COV to about $30,000.
But agency bosses note that their numbers might be slightly higher than HDB's when official figures are finally released, because their sales data is captured at an earlier point of the buying process - when a buyer exercises his option to purchase a home.
HDB is set to release flash estimates for the second quarter this week.
The agencies' data shows the median COV rising across most estates, with the increase especially pronounced in popular areas such as Bishan, Central and Queenstown.
According to PropNex, whose figures are based on sales closed from April to mid-June, the median COV for all flat types hit an eye-popping $55,000 in Central, $54,000 in Queenstown and $35,000 in Bishan.
These are steep increases from the median overall COVs of $27,000, $23,000 and $29,500 logged in the respective towns in the first quarter, according to official HDB figures.
Property analysts say the turnaround of COV levels is due to increased buying interest this quarter, and this is also reflected in the rising median resale flat prices.
Data from all agencies shows prices inching upwards across all flat types.
Based on DWG sales, for example, the median price of four-room flats went up by $4,000 in June to $398,000 compared to first-quarter figures. ERA Realty data shows the median resale price of five-room flats rose to $573,000 before dropping to $535,000 in June, compared to $550,000 in the first quarter.
Experts say that even though valuations are catching up with prices, COVs are still rising because of two factors.
First, demand is still strong because home buyers priced out from the private property market - which has also seen record high prices - are turning back to the HDB resale market.
Second, the supply of resale flats is shrinking as more owners are also taking their homes off the market, thanks to the effect of the recent rule changes.
'Flat owners are reluctant to sell as many have been affected,' said DWG director Chris Koh, referring to recent moves stipulating that banks can lend only 60 per cent of a home's value on a second property.
This has made it difficult for any home owner who wants to buy a new home before he sells his current one, causing many of them to simply put off selling altogether.
C&H's Mr Lu said demand in the resale market will likely remain high even though HDB is ramping up the supply of new homes. This is because these will take time to be built and enter the resale market.
Another interesting trend that has emerged from the data is that sales volume has dropped sharply from May to June.
DWG brokered 664 transactions in May, and 516 so far this month. At PropNex, the number of sales dipped from 434 in May to 142 to date.
On top of the shrinking number of sellers, some analysts attribute the June phenomenon to what they call the 'Khaw effect', referring to the slew of remarks made by newly minted National Development Minister Khaw Boon Wan since he took office.
Market observers say developers, home buyers and investors alike are adopting a wait-and-see attitude as they await clearer signals from the ministry.
In particular, they are looking to see if the Government will move to cool the market further if prices continue their upward march.
Still, most of Mr Khaw's recent moves have been targeted at the market for new flats which cater to young couples, noted ERA Realty key executive officer Eugene Lim.
'Key demand drivers of the resale market are upgraders and downgraders, permanent residents and those who cannot wait for new flats.'
But he added that further big price hikes are not likely as prices have already hit some resistance, especially for the larger flat types.
Mr Lu said agents are reporting that young buyers are holding back from buying resale flats after Mr Khaw said that HDB will look into offering more of its flats in mature estates, and this will also help cool demand somewhat.
This is exactly what potential home buyer Yvonne Koh, 27, and her boyfriend are hoping for.
'We were thinking about resale flats but the COVs are going up. Now, there is a wider range of flats offered by HDB, so we will wait for the new flats,' she said.