Source : Straits Times – 18 Jul 2009
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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