Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/219742
Title: THE PHENOMENON OF CASH-OVER-VALUATION (COV) AND FACTORS AFFECTING BUYER'S AND SELLERS COV DECISION
Authors: PAK WEI REN
Keywords: Real Estate
Cheng Fook Jam
2011/2012 RE
Issue Date: 14-Nov-2011
Citation: PAK WEI REN (2011-11-14). THE PHENOMENON OF CASH-OVER-VALUATION (COV) AND FACTORS AFFECTING BUYER'S AND SELLERS COV DECISION. ScholarBank@NUS Repository.
Abstract: Cash-Over-Valuation (COV) is the difference between the resale price and the valuation of a HDB resale flat. It is a topic that has caught much public attention as COV is at all time record high and has been perceived as a significant barrier to deter people buying resale flats in the public housing market. This dissertation examines the critical factors affecting the buyers’ and sellers’ decisions on COV, whether they consider themselves knowledgeable on the issue, as well as their supportiveness on the cessation of such practice. The questionnaire survey among 121 respondents reveals that most of them transacted their resale flats at COV. They have ranked location, market condition and state of urgency as the top three factors affecting their COV decisions. On the other hand, they have deemed public information from the HDB website as the least important factor affecting their decisions and are hoping that the authority can improve the information content of such public data by including more relevant details of past resale transactions. The survey results are also congruent with those garnered from the in-depth interviews with an estate agent and four selected survey respondents who completed the questionnaire. The research also suggests that there is no statistically significant correlation between the respondents’ perception of their understanding of COV and educational qualification. It further indicates that there is a disparity between buyers’ and sellers’ supportiveness on the practice of COV. In conformity with prior expectations, most sellers are supportive of the practice of COV and most buyers are not as supportive. A majority of the respondents also feel that it is inappropriate to agree on COV before the release of the valuation report. Given the quarterly release of public COV data and state of the market, this study also corroborates the anecdotal evidence that the negotiation of HDB resale price between buyer and seller has evolved to the extent that valuation is now commonly used as the minimum baseline.
URI: https://scholarbank.nus.edu.sg/handle/10635/219742
Appears in Collections:Bachelor's Theses

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