Source : Straits Times - 21 Aug 2008
WE refer to Ms Christina Heng’s letter, ‘Queries on HDB valuation scheme’ (Aug 12).
The methods adopted by the valuation profession are applicable to all properties, be it HDB flats or private properties. There is no new valuation method used.
To refresh our earlier reply on June 28 in response to Mr Patrick Tan’s query on ‘What determines market value of property’, we stated that the market value of a property is determined on the basis of a willing buyer and a willing seller, with both parties acting with knowledge, prudence and without compulsion in an arm’s-length transaction.
For homogeneous properties such as HDB flats, the common valuation method adopted is the direct comparison approach. This approach is similar to that used by a potential buyer when considering the purchase of a flat. He would look at the location, consider the age, size, design, height and other important characteristics of the flat and compare the prices paid for comparable flats in the locality.
The final selling price of a property is dependent on the demand and supply of a property and the negotiation between the buyer and seller. Some buyers may pay a premium for a flat for personal reasons. The cash top-up is a legitimate part of the resale market price. It is the willing buyer and seller that determines the final price and this final price as considered by the market forces can be above or below the valuation.
Janet Han (Ms)
Secretariat
Singapore Institute of Surveyors and Valuers
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