Clearing a misconception

Source : Straits Times – 18 Jul 2009

‘It is incorrect to say that higher HDB valuations will lead to higher HDB resale prices.’

MS JANET HAN, Secretariat, Singapore Institute of Surveyors and Valuers: ‘I refer to Tuesday’s letter by Ms Tan Say Yin, ‘HDB valuation hike may have led to higher resale prices’. We would like to explain the misconception about valuation raised in her letter. The purpose of valuation is to determine the market value of the property. A common method is to use the prevailing market prices of similar properties in the locality as a basis to determine the market value of the subject property. Valuation reflects the state of the market and the demand and supply situation. In recent months, the property market has somewhat stabilised because of the improved sentiment in the economy. The professional valuer therefore reflects the sentiment of the rising market in the valuation, but does not dictate the market prices agreed by both the buyer and seller. Hence, it is incorrect to say that higher HDB valuations will lead to higher HDB resale prices.’