First-time buyers are concerned about the Cash Over Valuation (COV) as it is not included in the purchase allowance, reports MediaCorp English news website TODAY.

Under the new scheme, first-time buyers of two- to four-bedroom HDB flats will receive an additional $30,000 in CPF housing allowance, while larger five-bedroom flats will receive an additional $10,000.

Some real estate agents said that resale HDB flat sellers have not increased their prices as a result, and they do not want sellers to do so because the chances of being coveted by buyers are lower.

Bona Real Estate agent Wayne Teo pointed out that those sellers who intend to cash in on the announcement of the allowance increase may not find buyers, especially first-time buyers, due to the risk of being offered a sale price that is too high compared to the market price.

He further pointed out that first-time buyers are most concerned about the cash premium, which is not included in the allowance, not to mention the current poor economic outlook, which makes first-time buyers generally sensitive to the asking price.

The premium is the difference in the sale price of a HDB flat over the assessed value and must be paid in cash. As such, it has a significant impact on the financial affordability of buyers. As the premium is negotiated between the buyer and the seller, it is considered a thermometer for the HDB resale market.

First-time buyer Foo Myn, 25, is a café manager. "Sellers understand that I can't afford the high premium and brokers generally tell sellers that the extra allowance is paid through the CPF and can't be used to cover the premium."

She added, "Even if the sellers raise the asking price, I am still not willing to compromise on my budget even if I qualify for a higher allowance because I don't have much in terms of either my deposit or CPF savings."

Two other Bona Industrial brokers, Shiddique Asyraaf and Fahmi Hassan, also observed that sellers have not raised their asking prices since the new financial case was announced last week, but did not rule out the possibility that some sellers might raise their asking prices in the near future.

Fahmi said that it was "too early" to say how much of an impact the new announcement would have on market prices, as it usually takes two to three months for the impact of new initiatives to be felt.

Shiddique said that first-time buyers are generally newlyweds who are likely to spend "tens of thousands of dollars in cash" on their wedding and honeymoon. "So they don't have a lot of cash available to pay the premium, let alone if the premium increases."

Annisa Ilham, a 25-year-old lab technician, is a first-time buyer. For her, even with the increased allowance, her main concern is to find a flat that fits her budget.

Some of the units she has seen over the past few months have gone up in price by as much as S$50,000.

To stay within her budget, she doesn't care if there are facilities near her home or if her workplace is close by.

Razlina Razak, who lives in Bukit Batok Seri, increased the price of her four-bedroom HDB flat by about $30,000 after the announcement of the new financial package, but it is still in the "market price" range.

Previously, the 41-year-old businesswoman had valued the five-year old flat at $620,000.

Based on the good condition of the flats, she has increased the asking price as she believes potential buyers will still want to buy.

"I still try to go by the market price because if we put the price up, no one will buy. We are still willing to negotiate on the price." She said.