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Thread: HDB valuation hike may have led to higher resale prices

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    Default HDB valuation hike may have led to higher resale prices

    http://www.straitstimes.com/ST%2BFor...ry_402741.html

    July 14, 2009 Tuesday

    HDB valuation hike may have led to higher resale prices


    THE resale prices of Housing Board flats have risen by 10 to 15 per cent in the past one to two years, despite the recession that began in September last year.

    The HDB may have contributed to the spike when it decided to raise the valuation prices of its flats last year, saying it would help buyers as a lower cash-above-valuation payment would result.

    The fact is, most buyers still ask for cash-above-valuation payment and the amount does not vary much from that before HDB increased the valuation tag.

    When I helped a friend who wanted to buy a flat, the valuation of a four-room HDB flat in Tampines was about $300,000 in 2007 and early last year, with buyers asking for about $30,000 cash. The price was therefore $330,000.

    I now hope to buy a resale HDB flat and the valuation of a similar flat is about $350,000 with a demand of about $20,000 cash above valuation.

    While the cash request is slightly lower, the valuation price has leapt. The price of a four-room flat in Tampines is about $370,000 now, some $40,000 more than the price early last year - and this is largely due to the higher valuation price.

    Instead of helping to stabilise prices, the HDB's spike in valuation has been instrumental in increasing resale prices.

    Tan Say Yin (Ms)

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    Default HDB flat valuations done by independent professionals

    http://www.straitstimes.com/ST%2BFor...ry_404638.html

    July 18, 2009 Saturday

    HDB flat valuations done by independent professionals


    I REFER to Tuesday's letter by Ms Tan Say Yin, 'HDB valuation hike may have led to higher resale prices'. Valuations are carried out by independent professional valuers, not HDB.

    These valuers are members of the Singapore Institute of Surveyors and Valuers and are licensed by the Inland Revenue Authority of Singapore.

    The valuation is based on actual transacted resale prices for similar flat types in the vicinity. This is a well-established industry practice and applies to both private and public housing valuation.

    Resale prices are affected by many factors such as the overall economy, property market sentiment and flat attributes such as location, size and age.

    To help flat buyers and sellers to make informed decisions, HDB provides the latest data on the HDB resale market online, including recent actual transacted resale prices and cash-over-valuation (COV) payments.

    Ms Tan mentioned that the valuation of a four-room flat in Tampines is about $350,000, with $20,000 COV. According to HDB's public housing data, the median transacted price for a four-room flat in Tampines was $331,000 in the first quarter of this year and the median COV amount was $4,000.

    About 38 per cent of all resale transactions in the same quarter were transacted either at or below valuation. We advise Ms Tan to shop around for a flat that meets her budget and preferences and negotiate for the best possible price.

    Chan-Wong Jee Choo Lily (Mrs)
    Deputy Director, Policy and Property
    Housing & Development Board

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    http://www.straitstimes.com/ST%2BFor...ry_404637.html

    July 18, 2009 Saturday

    There's a silver lining in higher prices


    I REFER to Tuesday's letter by Ms Tan Say Yin, 'HDB valuation hike may have led to higher resale prices'. The writer was incorrect to have suggested that the HDB raises or reduces the value of flats to suit sellers or buyers.

    HDB valuations are conducted by independent valuers who determine the value based on the condition of and existing demand for the property.

    The valuation also considers the willingness of buyers to pay cash over valuation. So, it is understandable that resale prices have risen about 30 per cent since the beginning of 2007, despite the recession.

    In an uncertain economy, public housing is always a popular choice and the recent statistics demonstrate just that.

    Looking at it positively, the price increase also helps many Singaporeans who bought their HDB flats during the previous peak of 1996; they would have been holding on to a negative asset since then as the resale price index (RPI) for 1996 was much higher than any since then, even that of 2007.

    In fact, prices dropped from 1996 by about 30 per cent, bottoming out in 2002. It is only due to the recent eclipse of the 1996 RPI - by prices in the third quarter of last year - that these Singaporeans now own a positive asset.

    Even with the current increase in HDB resale prices, first-time HDB owners have various options of buying resale flats with their Central Provident Fund money and enjoying up to $80,000 in government grants, or purchasing new subsidised flats via the Build-To-Order scheme.

    Adam Tan

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