THE usually sedate market for resale HDB flats has seen a surge of growth this year, with prices rising 11 per cent so far and 6.6 per cent from July to September alone. But homebuyers who are worried they are being priced out of the market need not despair - there are still good buys out there.

The trick, say the experts, is in knowing where to look.

A good place to start would be the HDB's statistics showing cash-over-valuation (COV) for resale transactions according to each town.

This figure calculates the cash amount a buyer has paid over and above a flat's valuation.

It has to be paid fully in cash, as home loans are pegged to valuations. 

If a buyer pays $200,000 for a flat valued at $150,000, he is deemed to have paid $50,000  more than valuers think it is worth.

Based on this, property agents pick out Queenstown, Marine Parade, Clementi and Bukit Merah as some towns where flats may be overpriced.

In Queenstown, for example, five-room flats there were going for a median COV of $42,000 from April to June.  

This more than doubled to $110,000 in the next quarter, a period where the median figure islandwide was just $17,000.

In Bukit Timah, the median COV for executive flats from April to June was $35,000. This figure almost quadrupled to $137,500 in the third quarter.

Other possibly overpriced areas flagged by property agents include Clementi, where executive flats went for a median COV of $155,000 in the third quarter, and Marine Parade, where the figure for five-room flats more than doubled to $84,000.

The massive growth in COV for larger flats in central districts can largely be attributed to private property owners who are moving to HDB flats after cashing out of their homes through collective sales.

These cash-rich buyers, unlike typical HDB flat buyers, do not have budgets constrained by valuations, as they do not need home loans. They also zero in on the bigger units in districts closer to central Singapore.

But the party may not last for long. The chief executive of property agency PropNex, Mr Mohamed Ismail, said: "Such buyers are not expected to continue to be available in the near future when the market settles down."

Older and overpriced

MANY of the districts deemed overpriced by agents are older districts,aged 20 years or more.

This means buyers will eventually have to pay a hefty bill for renovations even after paying top dollar for these flats, warned the assistant vice-president of ERA Singapore, Mr Eugene Lim.

Buyers who pay big sums over the valuation for their flats also take a big risk.

The executive director of HSR property group, Mr Eric Cheng, points out that buyers cannot be sure if such prices can be achieved again if they choose to sell their flats a few years down the road.

Good buys, meanwhile, can be found in more low-key towns surrounded by attractive amenities, such as in Woodlands and Pasir Ris.

Woodlands, like Jurong East and Tampines, is a regional centre that is likely to see more developments as properties within central Singapore become more expensive, said ERA's Mr Lim.

This may include more shopping malls and offices.

For the July-September period, buyers of executive flats in Woodlands paid a median COV of just $6,500. Three months before that, the figure was zero.

Younger but cheaper

MEANWHILE, Pasir Ris, which has relatively younger flats compared to its eastern neighbours, Bedok and Tampines, is readily accessible to recreational facilities by the sea and "certainly a value buy" for Singaporeans seeking a balanced lifestyle, according to Mr Ismail.

For that privilege, buyers paid a median COV of just $20,000 for five-room flats in the third quarter.

In the western side of Singapore, Choa Chu Kang, Bukit Panjang and Jurong West are other towns that agents feel present good value.  

These areas, they point out, have a higher number of flats on the market, which helps control the asking prices of home owners who have to compete with more parties in order to make a sale.  

Agents expect the climb of resale flat prices islandwide to slow over the next 12 months, after the heady rise in the third quarter.

Mr Cheng, Mr Ismail and Mr Lim estimate that their prices will grow up to 8 per cent to 12 per cent over the year, on the back of continued economic growth and as the remaining private property owners involved in recent collective sales buy their replacement homes.

The managing director of C&H Realty, Mr Albert Lu, feels the climb will be even smaller, at just 2 per cent to 3 per cent.

He said: "I think prices have more or less reached their high." Many flat owners, he noted, were delaying selling their flats because they were resisting high asking prices of replacement units elsewhere.

The rentals of HDB flats, meanwhile, is still expected to grow over the next year, as more foreigners take up residence in Singapore and find private homes too expensive to live in.

Mr Lu and Mr Lim think it will grow another 10 per cent, while Mr Ismail expects a 15 per cent surge.

Mr Cheng however, caps his estimate at 5 per cent because the surge in rentals - at times of more than 50 per cent over the last year - has simply been "too drastic".

A balanced choice Pasir Ris, which has relatively younger flats compared to its eastern neighbours, Bedok and Tampines, is readily accessible to recreational facilities by the sea and "certainly a value buy" for Singaporeans seeking a balanced lifestyle.

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