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Thread: Buyers and sellers starting to go by past transactions

  1. #1
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    Default Buyers and sellers starting to go by past transactions

    http://www.straitstimes.com/archive/...tions-20140314

    Buyers and sellers starting to go by past transactions

    Few plan to get private valuations as they may be different from HDB's

    Published on Mar 14, 2014

    By Janice Heng And Rachel Au-Yong


    DESPITE uncertainty over the new Housing Board resale process, buyers and sellers are adapting to the practice of looking at past transactions rather than valuations, said property agents.

    Few intend to get private valuations ahead of the official HDB valuation, they added.

    Negotiations used to begin with the HDB valuation report, before buyers and sellers haggled over a premium or cash over valuation (COV).

    Now, buyers can get that report only after a price has been agreed. The fear is that the valuation may be lower than expected, meaning a surprisingly high COV.

    Backing out comes with a price, as buyers must pay both for the option to purchase - which can cost up to $1,000 - as well as the valuation, noted Dennis Wee Realty agent Thomas Hee.

    Sellers, meanwhile, fear selling themselves short, said Dennis Wee Realty agent Kelly Lin.

    "They are very realistic now, but some are wondering if they are being 'too realistic' and settling for less than they could get."

    Yet few buyers or sellers are considering unofficial valuations as a substitute, said agents.

    One reason might be ignorance of that option. Mr Francis Cheng, for instance, wrote in to The Straits Times Forum to ask if buyers or sellers can still get a private valuation before deciding a price.

    The answer is yes. Still, this may not be worth it, said agents.

    Private valuations may inadvertently give sellers and buyers false hope, said ERA Realty agent J.A. Goh. "If the private valuation turns out to be very different from the HDB's, there can be a lot of disappointment," he said.

    Why pay thousands of dollars for private valuations when you can rely on past transactions and your agent for an estimate, asked PropNex agent Marcus Luah.

    "In mature estates, we'll always be within $5,000 range of the final valuation. It's about $20,000 in non-mature ones, depending on the unit's characteristics," he said.

    Furthermore, buyers looking at non-mature estates have little to worry about, as prices there are now often close to valuations.

    If HDB valuations follow the trend in the private property market, even buyers of choice units may not have to fear being surprised by a high COV, said agents.

    PropNex Realty agent Abdul Aziz Aziz is handling units in Telok Blangah, where COVs were hitting $50,000 to $60,000.

    But he has told his sellers that they cannot expect a high premium now. "The valuation will probably be closer to the last transacted prices," he said.

    If valuations take a cue from past prices, previous high COVs will, in effect, be incorporated.

    Meanwhile, some agents are hoping that HDB-approved valuers will be flexible.

    "I hope that as long as the agreed price comes within 10 per cent to 20 per cent of the valuer's initial estimate, they will try to match the agreed price," said Dennis Wee Realty agent Dennis Foo.

    "Otherwise, if they give a low valuation, things could be difficult. We'll probably see a lot more people forfeiting their options."

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  2. #2
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    Default To calculate per square metre per year.(BTO BIGGER UNIT HIGHER PER SQM)

    If you have a HDB unit of 126 sqm, Remaining Lease of 82 years, what should your selling price?

    5 room HDB valuation SGD 640,000 for 126 sqm on 28 Feb 2014, asking SGD 690,000

    Lease Start Date : 01 Jul 1997
    Lease Duration : 99 years
    Remaining Lease : 82 years (as at date of enquiry)

    Geylang 33 11 to 15 137.00 Model A 1996 $680,000.00 Dec 2013
    Geylang 33 01 to 05 137.00 Model A 1996 $657,000.00 May 2013

    Blk 33 Balam Rd S(370033)
    Lease Start Date : 01 Jun 1996
    Lease Duration : 99 years
    Remaining Lease : 81 years (as at date of enquiry)

    After 10 Mar 2014.

    same 5 room HDB asking for SGD 760,000 compare to BLK 123 (80.85*126*82)
    SGD 835,342 - 760,000 = SGD 75,342.2 discount.

    --------------------------------------------------------------------------

    Geylang 33 11 to 15 137.00 Model A 1996 $680,000.00 Dec 2013

    80.85*137*81 = 897,192 = 897,192-680,000 = SGD 217,192 discount.($680,000.00 Dec 2013)

    ---------------------------------------------------------------------------------------

    123 Geylang East Ctrl 01 to 05 120 Improved 1982 $650,000 Mar 2014

    Blk 123 Geylang East Ctrl S(380123)
    Lease Start Date : 01 May 1982
    Lease Duration : 99 years
    Remaining Lease : 67 years (as at date of enquiry)

    To calculate per square metre per year.

    (Sale Price / Floor Area)/Remaining Lease = XX per sqm per year.

    (650,000/120)= 5416.66 per sqm

    5416.66/67 = 80.85 per sqm per year.

    ---------------------------------------------------------------------------------------

    2. Which unit is cheaper per sqm?

    To calculate per square metre per year.

    (Sale Price / Floor Area)/Remaining Lease = XX per sqm per year.

    (760,000/126)= 6031.74 per sqm

    6031.74/82 = 73.55 per sqm per year.

    ---------------------------------------------------------------------------------------

    3. Which unit is cheaper per sqm per year?

    To calculate per square metre per year.

    (Sale Price / Floor Area)/Remaining Lease = XX per sqm per year.

    (760,000/126)= 6031.74 per sqm

    6031.74/82 = 73.55 per sqm per year.

    ---------------------------------------------------------------------------------------

    4. What is the value of HDB when the lease remaining is zero?

    ZERO

  3. #3
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    if buyers willing to be dumb and use calculation per psf per year.

    than to based on valuation and past transactions

  4. #4
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    Default Dummies Guide to HDB valuation.

    I know I can't change all the dumb, but I am sure I can change one dumb at a time.

    4. What is the value of HDB when the lease remaining is zero?

    ZERO

  5. #5
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    Default

    Quote Originally Posted by Arcachon View Post
    I know I can't change all the dumb, but I am sure I can change one dumb at a time.

    4. What is the value of HDB when the lease remaining is zero?

    ZERO
    don't worry about the Hdb lease remain zero

    it will be under sers (enbloc) even before lease balance of 30-40yrs

  6. #6
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    too bad govt entity don't use your way of calculation to derive to the prices or valuation or depreciation

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    Still have 82 years to convince them.

  8. #8
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    Quote Originally Posted by jwong71 View Post
    don't worry about the Hdb lease remain zero

    it will be under sers (enbloc) even before lease balance of 30-40yrs
    Government 'considering' lease buyback for bigger HDB flats

    http://www.straitstimes.com/breaking...flats-20140224

    Maybe I am a bit sensitivity from their news, what I read is they are going to stop sers (enbloc) since there will be lot of free space when PLAB is move.

    HDB Bigger unit per sqm will cost more for BTO and resale.

    HDB resale valuation will be close to market value instead of control. BTO de link from resale price.

    Dumb will start to wake up HDB is leasehold and it will be zero value after 99 years. Resale HDB valuation will be per sqm per year.

  9. #9
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    Default Wonders of the HDB enbloc scheme

    http://serendipityafterall.blogspot....oc-scheme.html

    However, the reason the residents of my parent’s estate are up in arms is none of those above. It is because most of them will have to TOP UP cash if they want a new flat of the same size. Because according to the HDB, the new estate they are moving these residents to is so valuable that even after the subsidies, it is more expensive then their current flat.


    ........HDB will not engage or try to help these people but continues to publish articles showing the shining side of the enbloc scheme and telling everyone it is only in very rare instances where people are unhappy with it. Well try doing a survey at my parent’s estate. I’d really like to see how often the “really rare instance” shows up. HDB has no answer or compromised for the situation except to downgrade to a smaller flat. They compassionately told the old neighbour the new estate has really small flats especially catered for the elderly. Auntie replied,” So my children and grandchildren won’t even have a place for a proper weekend family gathering anymore. “
    All these while, the HDB maintains incidences of unhappiness are rare. When the resident committee approached the HDB for help they were told that their case will be reviewed after the general elections. What’s that to mean? Don’t vote PAP and you will be left to die or what? Anyway, PAP won in the end. But the issue remains in limbo. The residents there will just have to suck it up and pay more a flat of the same size in a lousier plot of land because they are suay to kena chosen for this particular enbloc scheme. Or they can downgrade to a smaller flat and lousier quality of life. HDB won’t care about this one particular enbloc project in trouble; the majority of projects are alright. Did the government say everyone matter and no one left behind? Well residents at my parents’ estate aren’t feeling the love.

    http://forums.vr-zone.com/chit-chatt...made-move.html

    The Temasek Review (TR) has learnt that an emergency meeting for affected residents of Clementi Avenue 5 (West Coast GRC) has been called today at 1600 hours over the planned forced SERS upgrading of Block 321, 322 and 323.

    According to an affected resident, Block 321 – Block 323 has been scheduled for en bloc sale (back to HDB?) under the SERS upgrading scheme and affected residents were not consulted on.

    The resident, who identified himself as Mr Tong said that they were merely informed of the planned en bloc and were not asked for their permission or opinion.

    Mr Tong furthered that the affected residents were given a choice of “upgrading” to a flat of the same type (ie: 3-room to 3-room) or to a larger unit but the compensation monies given for their existing unit were low compared to the market rate.

    “As such, those who choose to say, upgrade from a 3-room flat to a 3-room flat will get roughly $50,000 in cash compensation while those who wants a to upgrade from a 3-room flat to a 4-room or 5-room flat will need to fork out about $450,000 to make up for the differences”, he added.

    Other residents this correspondent spoke to have expressed disbelieve at the ridiculous price of the new offered flats and the pathetic offer of about $50,000 for a one-to-one same unit “upgrade” compared to if they were to sell their flat in the open market.

    The new3-room flats offered are also smaller in seze compared to the existing unit.

    Mdm Tang, another angry resident of Clementi Avenue 5 for 30 years is pissed that the SERS upgrading was shoved down her throat without her permission nor any say in the matter.

    Meanwhile, at a coffeeshop nearby, perturbed residents were heard uttering that come this election, they and their familes would vote for any pigs, dogs or cats the opposition party field over the People’s Action Party (PAP).

    “These (PAP) government officials are not humans [不是人] and the present government has obviously lost its directions”, said Mdm Tang.

    Mdm Tan said: “The government thinks we are old and useless, so easy to “eat” (translated from hokkien “jiat”)”, a sentiment shared by many at the coffeeshop.

    It is understood that the affected residents will be holding an emergency meeting at the void deck of Block 322 at 1600 hours today to discuss this and hopefully get the relevant authorities to “listen”.

    TR will update this article as and when new information are available.

    En-bloc old flat but never demolished are mostly tendered out to private coy for rental to FT?
    Last edited by Arcachon; 21-03-14 at 19:30.

  10. #10
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    http://paulngproperty.wordpress.com/...pest-hdb-2013/

    Blk 66 Circuit Road

    Type – 2′STD’

    Size – 484.38Sqft

    Price – $248,000 / $512.40psf

  11. #11
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    Default What is the most effective way of destroying a city - carpet bombing or rent controls

    http://www.waleedhanafi.com/2007/03/...economics.html

    SATURDAY, MARCH 24, 2007

    Singapore - En bloc madness and Economics 101
    I had an economics professor in university who put a single question on a mid-term exam. What is the most effective way of destroying a city - carpet bombing or rent controls?

    Singapore has managed to come up with a third alternative - the abrogation of private property rights through the forced sale of one's home. The governing law for all this is referred to as en bloc sales.

    I have already written about the disruption and waste caused when developers, real estate agents and speculators are allowed to force the sale and destruction of buildings.

    I can now also confirm that the economic theory which predicts that investment will cease when returns are no longer certain holds as well. Whether it is rent controls which cause landlords to stop investing in their buildings, or en bloc sales, the result is the same. Perfectly good buildings are being allowed to deteriorate because owners are afraid to invest in case they are forced to sell before they can recoup their money.

    The evidence is clear to anyone who is trying to rent an apartment. If there is any chance the building can be forced en bloc, landlords are simply refusing to do any upgrading or repairs. I have been offered apartments in otherwise desirable buildings at very low rents, as long as I am willing to take the apartment as is.

    Most of these apartments are coming off lease, and the landlord would normally do a full renovation.

    Not any more.

    When is the Singapore government going to admit that they made a mistake and that en bloc sales have gone out of control? The number of apartments destroyed in the Orchard area has now exceeded 4,000, and new en bloc sales are announced weekly.

    This will eventually stop on its own of course - when all the buildings have been torn down.

  12. #12
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    Quote Originally Posted by Arcachon View Post
    http://serendipityafterall.blogspot....oc-scheme.html

    However, the reason the residents of my parent’s estate are up in arms is none of those above. It is because most of them will have to TOP UP cash if they want a new flat of the same size. Because according to the HDB, the new estate they are moving these residents to is so valuable that even after the subsidies, it is more expensive then their current flat.


    ........HDB will not engage or try to help these people but continues to publish articles showing the shining side of the enbloc scheme and telling everyone it is only in very rare instances where people are unhappy with it. Well try doing a survey at my parent’s estate. I’d really like to see how often the “really rare instance” shows up. HDB has no answer or compromised for the situation except to downgrade to a smaller flat. They compassionately told the old neighbour the new estate has really small flats especially catered for the elderly. Auntie replied,” So my children and grandchildren won’t even have a place for a proper weekend family gathering anymore. “
    All these while, the HDB maintains incidences of unhappiness are rare. When the resident committee approached the HDB for help they were told that their case will be reviewed after the general elections. What’s that to mean? Don’t vote PAP and you will be left to die or what? Anyway, PAP won in the end. But the issue remains in limbo. The residents there will just have to suck it up and pay more a flat of the same size in a lousier plot of land because they are suay to kena chosen for this particular enbloc scheme. Or they can downgrade to a smaller flat and lousier quality of life. HDB won’t care about this one particular enbloc project in trouble; the majority of projects are alright. Did the government say everyone matter and no one left behind? Well residents at my parents’ estate aren’t feeling the love.

    http://forums.vr-zone.com/chit-chatt...made-move.html

    The Temasek Review (TR) has learnt that an emergency meeting for affected residents of Clementi Avenue 5 (West Coast GRC) has been called today at 1600 hours over the planned forced SERS upgrading of Block 321, 322 and 323.

    According to an affected resident, Block 321 – Block 323 has been scheduled for en bloc sale (back to HDB?) under the SERS upgrading scheme and affected residents were not consulted on.

    The resident, who identified himself as Mr Tong said that they were merely informed of the planned en bloc and were not asked for their permission or opinion.

    Mr Tong furthered that the affected residents were given a choice of “upgrading” to a flat of the same type (ie: 3-room to 3-room) or to a larger unit but the compensation monies given for their existing unit were low compared to the market rate.

    “As such, those who choose to say, upgrade from a 3-room flat to a 3-room flat will get roughly $50,000 in cash compensation while those who wants a to upgrade from a 3-room flat to a 4-room or 5-room flat will need to fork out about $450,000 to make up for the differences”, he added.

    Other residents this correspondent spoke to have expressed disbelieve at the ridiculous price of the new offered flats and the pathetic offer of about $50,000 for a one-to-one same unit “upgrade” compared to if they were to sell their flat in the open market.

    The new3-room flats offered are also smaller in seze compared to the existing unit.

    Mdm Tang, another angry resident of Clementi Avenue 5 for 30 years is pissed that the SERS upgrading was shoved down her throat without her permission nor any say in the matter.

    Meanwhile, at a coffeeshop nearby, perturbed residents were heard uttering that come this election, they and their familes would vote for any pigs, dogs or cats the opposition party field over the People’s Action Party (PAP).

    “These (PAP) government officials are not humans [不是人] and the present government has obviously lost its directions”, said Mdm Tang.

    Mdm Tan said: “The government thinks we are old and useless, so easy to “eat” (translated from hokkien “jiat”)”, a sentiment shared by many at the coffeeshop.

    It is understood that the affected residents will be holding an emergency meeting at the void deck of Block 322 at 1600 hours today to discuss this and hopefully get the relevant authorities to “listen”.

    TR will update this article as and when new information are available.

    En-bloc old flat but never demolished are mostly tendered out to private coy for rental to FT?
    Only these three blocks were affected. It looks like preparation for a new station for the CRL.
    https://maps.google.com.sg/maps?q=Bl...ed=0CAoQ_AUoAg

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