HDB valuation hike may have led to higher resale prices

Source : Straits Times – 14 Jul 2009

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)