IREFER to the report, "Resale flats at or below valuation available" (my paper, Sept 15).

National Development Minister Mah Bow Tan responded to questions in Parliament on Monday on whether the Government would take action to curb soaring cash-over-valuation (COV) sums in recent months.

He said that Singaporeans looking to buy resale Housing Board (HDB) flats could find such flats on the market that could be purchased without COV.

He added that buyers should do research, look around and consider carefully before "coughing up the COV when asked by agents".

Is this realistic?

Take, for example, a resale flat in Tampines. The asking price for a four-room New Generation unit can be as much as $20,000 above valuation.

Recently, my relative was advised by an HDB officer to sell his three-room unit and buy a resale unit, as the interest rate of a bank loan he had taken up was escalating, and he had difficulty servicing it.

He was advised to take up an HDB loan when purchasing a resale flat, as the interest rate is fixed.

He sold his flat, but is now "homeless" because, despite the help that the HDB loan will provide, the resale flats in Tampines are still priced beyond his means, due to high COV sums.

Maybe HDB should conduct a study to examine the reasons for the high COV sums.

Is it due to an influx of permanent residents who do not mind paying COV, or are owners of apartments sold en bloc driving up the COV amount?

Or perhaps it is due to fewer HDB flats being built, which may be driving up the price of resale flats.

As HDB flats are built for the common citizen, resale flats should be made more affordable.

Mr David Soh Poh Huat

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