http://www.businesstimes.com.sg/arch...ature-20140321
Published March 21, 2014
SRX launches real-time property pricing feature
CEO says X-Value can 'mitigate the problems faced by HDB home buyers'
By Lynette Khoo [email protected]
[SINGAPORE] Negotiating property prices, especially for HDB resale flats, will no longer be like a shot in the dark with "X-Value", a new real-time pricing feature.
Launched by the Singapore Real Estate Exchange (SRX), it is derived algorithmically based on past transacted prices of comparable units. It is also adjusted for factors such as size, location, amenities, floor level and the direction where the unit is facing.
"It is not an appraisal, but aims to provide a standard for pricing homes and assisting pre-valuation financing decisions," SRX said yesterday.
SRX chief executive and co-founder Sam Baker told reporters that X-Value can "mitigate the problems faced by HDB home buyers", following recent changes in the HDB resale rules that require buyers to first obtain the option to purchase (OTP) from the sellers before they can seek HDB valuation for the units.
While the new rule is aimed at getting buyers and sellers to focus on market prices rather than cash-over-valuation (COV), both buyers and sellers are treading with caution now that they can no longer use the HDB valuation report as the starting point or benchmark for pricing a unit. This is unlike in private home transactions where buyers can get an indicative valuation from banks before entering into an OTP.
Property agents note that buyers have been concerned that they would have to botch their deals and forfeit the downpayment if they have to fork out a large cash outlay due to a huge discrepancy between the agreed price and the subsequent HDB valuation.
"Sellers feel more at ease knowing there's a good estimate of their value and can make informed decisions when pricing their properties," said Thomas Tan, executive director of RE/MAX Singapore.
PropNex key executive officer Lim Yong Hock described the X-Value as a "saving grace" for buyers and sellers in the HDB resale market and noted that SRX has the benefit of being plugged into data on both caveat and non-caveat transactions.
Mr Baker said that the timing of the launch was coincidental with the recent HDB rules given that the project was started one year ago with funding from the government through the Infocomm Development Authority of Singapore (IDA). "There is no reason why property prices should not have the same level of clarity as that of stock prices," he said.
Some websites such as Property Guru and Baize Technology have tried to provide a similar service. But Property Guru provides only valuation estimates for private residential properties while Baize Technology - founded by a software engineer with its core business in software development - does not generate an estimated price for units where there are no recent comparable transactions.
Richard Tan, founder of Baize Technology, told BT that his website generates an estimated price based on "a certain algorithm that is widely accepted by the industry" and offers free property reports.
Jeremy Lee, co-founder and chief technology officer of SRX, explained that X-Value is derived using a multivariate method that can isolate and adjust for individual factors. Where there are no relevant recent transactions, the X-Value can still be generated by factoring in the price indices of SRX and URA to make adjustments for older transacted prices.
It boils down to the "robustness of the system", said Mr Lee. "The question is how to make sure you generate a consistently good number for each transaction."
The project team for X-Value includes real estate agencies, consultants from academic institutions, government agencies as well as A*Star's Institute for Infocomm Research and StreetSine, the technology provider for SRX. Comparable transactions and factors used in the X-Value of a home are listed in a summary report, which is available to agents registered with SRX.
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