HDB correspondence on public newsletters

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Property valuers follow guidelines, not prices

Published on Mar 14, 2014

WE REFER to the comment made by Mr Mohamed Ismail Gafoor of PropNex Realty that "HDB-appointed valuers could follow the practice in the private market, and largely match their valuations to the reported price" in an article ("Rise and fall of COV - the property mover"; Wednesday).

The Singapore Institute of Surveyors and Valuers (SISV), the national body representing the valuation profession, regrets Mr Ismail's comment, which casts aspersions on the professionalism and integrity of valuers.

In the valuation of all properties, be it HDB flats or private properties, valuers have to adopt the principles of valuation as prescribed in SISV's valuation standards and guidelines.

The market value of a property is the estimated amount for which the property should exchange on the valuation date between a willing buyer and a willing seller, in an arm's length transaction after proper marketing and where the parties have each acted knowledgeably, prudently and without compulsion.

The price of a property is the amount asked, offered, or paid for the property. Due to the financial capabilities, motivations or special interests of any given buyer and seller, the price paid for the property may or may not have any relation to the value that might be ascribed to the property.

While transacted prices can be a good indication of the market value of a property, it does not follow that a valuer will largely match the value of a property to its reported price.

Janet Han (Ms)

Secretariat

Singapore Institute of Surveyors and Valuers
 

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Raise option fee to ensure flat buyers are serious

Published on Mar 14, 2014

I APPLAUD National Development Minister Khaw Boon Wan's move away from valuation-based negotiations to market-based negotiations in the resale of HDB flats. ("Deals not decided on COV under new HDB resale rules"; Tuesday).

Buyers and sellers must now agree on a price before seeking an official valuation.

The idea is to discourage cash over valuation (COV), the cash premium a resale flat buyer pays above the HDB valuation of the unit.

But the seller may be penalised as the buyer's option-to-purchase period is now 21 days, instead of 14 days. If the buyer chooses to abort the deal, through no fault of the seller, the seller has to wait 21 days before he can put his flat on the market again.

To ensure that a buyer does his sums properly and is fully prepared to accept the valuation, whether it is in favour of the buyer or not, it may be better to raise the option fee to 1 per cent of the sale price, in line with that of private property transactions.

This will deter buyers from getting out of the deal too easily.

Daniel Choy Tuck Leong
 

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Buyers and sellers starting to go by past transactions
Few plan to get private valuations as they may be different from HDB's


Published on Mar 14, 2014

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Private valuations are not only costly, but they may also give false hope. "If the private valuation turns out to be very different from the HDB's, there can be a lot of disappointment," said ERA Realty agent J.A. Goh. -- ST PHOTO: JAMIE KOH

By Janice Heng And Rachel Au-Yong
DESPITE uncertainty over the new Housing Board resale process, buyers and sellers are adapting to the practice of looking at past transactions rather than valuations, said property agents.

Few intend to get private valuations ahead of the official HDB valuation, they added.

Negotiations used to begin with the HDB valuation report, before buyers and sellers haggled over a premium or cash over valuation (COV).

Now, buyers can get that report only after a price has been agreed. The fear is that the valuation may be lower than expected, meaning a surprisingly high COV.

Backing out comes with a price, as buyers must pay both for the option to purchase - which can cost up to $1,000 - as well as the valuation, noted Dennis Wee Realty agent Thomas Hee.

Sellers, meanwhile, fear selling themselves short, said Dennis Wee Realty agent Kelly Lin.

"They are very realistic now, but some are wondering if they are being 'too realistic' and settling for less than they could get."

Yet few buyers or sellers are considering unofficial valuations as a substitute, said agents.

One reason might be ignorance of that option. Mr Francis Cheng, for instance, wrote in to The Straits Times Forum to ask if buyers or sellers can still get a private valuation before deciding a price.

The answer is yes. Still, this may not be worth it, said agents.

Private valuations may inadvertently give sellers and buyers false hope, said ERA Realty agent J.A. Goh. "If the private valuation turns out to be very different from the HDB's, there can be a lot of disappointment," he said.

Why pay thousands of dollars for private valuations when you can rely on past transactions and your agent for an estimate, asked PropNex agent Marcus Luah.

"In mature estates, we'll always be within $5,000 range of the final valuation. It's about $20,000 in non-mature ones, depending on the unit's characteristics," he said.

Furthermore, buyers looking at non-mature estates have little to worry about, as prices there are now often close to valuations.

If HDB valuations follow the trend in the private property market, even buyers of choice units may not have to fear being surprised by a high COV, said agents.

PropNex Realty agent Abdul Aziz Aziz is handling units in Telok Blangah, where COVs were hitting $50,000 to $60,000.

But he has told his sellers that they cannot expect a high premium now. "The valuation will probably be closer to the last transacted prices," he said.

If valuations take a cue from past prices, previous high COVs will, in effect, be incorporated.

Meanwhile, some agents are hoping that HDB-approved valuers will be flexible.

"I hope that as long as the agreed price comes within 10 per cent to 20 per cent of the valuer's initial estimate, they will try to match the agreed price," said Dennis Wee Realty agent Dennis Foo.

"Otherwise, if they give a low valuation, things could be difficult. We'll probably see a lot more people forfeiting their options."

janiceh@sph.com.sg
 

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Some sellers 'may exploit loophole'

Published on Mar 14, 2014

By Rachel Au-Yong


WITH few comparable transactions to go by, anxious sellers of rare units may try to exploit a loophole in new Housing Board rules, several property agents said.

New rules dictate that only the buyer or his agent can apply for HDB-approved valuations after a price has been agreed with the seller. Sellers no longer get a copy as they do not need it in theory, unlike buyers who need it to apply for bank loans.

But while sellers of typical flats have plenty of transactions to take reference from, those selling rarer units may feel like they are fumbling in the dark without a valuation to guide asking prices.

"If a seller really wants to find out how HDB values his flat, he could just get a friend to pose as a buyer, get the valuation, then let the option lapse after 21 days," said ERA Realty agent J.A. Goh.

This may happen for unique flats such as the discontinued Design, Build and Sell Scheme flats, or the Pinnacle@Duxton, which will see its minimum occupancy period expire at the end of this year. "The Pinnacle is public housing but it's so unique that you can't exactly base prices on nearby HDB flats," Mr Goh said.

"Sellers may want peace of mind and find out what is reasonable from the HDB," he added.

Getting a friend or relative to pose as a buyer and getting an HDB-approved valuation is cheaper than going through private valuers. An HDB-approved valuation costs $191.90 for a three-room flat or larger, while private valuations can cost thousands of dollars. However, most are unlikely to resort to getting friends or family members to pass off as buyers.

"The prices of a typical unit are pretty standard," said Dennis Wee Realty agent Dennis Foo. "If you get a valuation just to 'be sure', you'll lock yourself out from a potential deal for the next 21 days. There's no point."
 

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Serangoon North HUDC goes private
Move paves way for owners to seek potentially lucrative collective sale



PUBLISHED ON MAY 9, 2014 1:18 AM 1 0 0 0

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Resident R.C. Mohan (above) voted for the privatisation of Serangoon North HUDC estate "because the value of the place will go up (and) it provides some security if we want to sell it in the future". -- ST PHOTOS: KUA CHEE SIONG

BY JANICE HENG AND JOANNA SEOW


SERANGOON North HUDC estate has been privatised successfully, making it the 14th of 18 such once-public housing estates to complete the journey.

The estate has become a strata-titled property under the Land Titles (Strata) Act, said the Housing Board in a statement yesterday.

The move opens the way for a collective sale to private developers, which has meant windfalls for home owners in the past.

Serangoon North "may stand a better chance at a successful en bloc sale (than other former HUDC estates)... as its land area is smaller", said SLP International Property Consultants head of research Nicholas Mak.

The estate comprises 244 flats at Blocks 128 to 134 in Serangoon North Avenue 1.

But Mr Mak added that owners would have to be patient as land prices are softening now.

Residents have no plans for an attempt at a collective sale soon, said Mr Poon Mun Wai, vice-chairman of the pro-tem committee for the privatisation. "I think we will take one step at a time."

However, some residents might try to cash out by selling their individual units.

Mr Mak notes that some are already offering their flats at prices ranging from $660 per square foot (psf) to $770 psf, or around $1.1 million to $1.3 million - about 5 to 20 per cent lower than recent sales at nearby condominium Regent Ville.

Now that the units are private, their prices should hold up amid a cooling market, said R'ST Research director Ong Kah Seng.

But they will not fetch large premiums as there is no immediate collective-sale pressure, he added.

Serangoon North's successful privatisation leaves four estates still in the midst of the process: Braddell View, Potong Pasir Avenue 1, and Hougang Avenues 2 and 7.

Project manager R.C. Mohan, 65, voted for privatisation "because the value of the place will go up (and) it provides some security if we want to sell it in the future".

With Aljunied-Hougang-Punggol East Town Council no longer responsible for the estate, a Management Corporation Strata Title council must be elected in 90 days to manage and maintain it.

Improvement plans will depend on sinking funds from the town council, which is giving the estate an estimate, said Mr Poon.

But one priority might be to "protect our own carpark". Currently, there is no gantry restricting access to its carpark spaces.

Another is separating the estate from surrounding blocks. "I think the residents would like to fence up the whole estate," Mr Poon said.

Such moves have caused friction in other HUDC estates. Shunfu Ville's fence cut off a walkway leading from Thomson Garden landed estate to Shunfu Road.

Thomson Garden residents thus have to take a longer route to amenities such as Shunfu market and Marymount MRT station.

No such conflicts have arisen since Serangoon North HUDC estate gained the minimum 75 per cent of votes for privatisation in 2011.

But resident Sim Moh Yong, 61, has a similar gripe. "Now when I want to drink coffee, I just walk straight to the market. (When) they wall up the outside, I would have to walk through only certain gates," said the retiree, who did not vote for the privatisation.
 

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HDB resale volume improves in April, but prices little changed
PUBLISHED ON MAY 9, 2014 1:19 AM 1 0 0 0



BY JANICE HENG
THE Housing Board resale market became a little livelier last month, with 1,484 flats sold - 4.4 per cent up from March, and the most since last July.

But prices were flat, edging down 0.2 per cent after having recovered 0.3 per cent in March, according to Singapore Real Estate Exchange (SRX) flash figures yesterday.

Property experts and agents took a cautious view of the pickup in activity, noting that it was partly due to the end of the traditionally quiet festive period.

April's volume was also 14.4 per cent lower than a year ago.

But the experts added that transactions could keep rising.

"As prices continue to moderate, we expect more buyers coming back to the resale HDB market over the coming months," said ERA Realty key executive officer Eugene Lim.

Most property agents are less optimistic.

C&H Properties agent Lim C.M. said many buyers do call, but few end up buying. But Dennis Wee Realty agent Judy Tay has seen some buyers return.

One of them was civil servant Lee Chee Kwong, 47, who decided to buy now as prices seemed to be flat: "I didn't see much movement." He bought a four-roomer in Punggol East last month.

Agents and experts agree, saying that prices will fall a bit further before stabilising.

Last month's overall slide was due to prices of three-, four- and five-room flats falling 0.2 per cent, 0.8 per cent and 0.4 per cent respectively. But executive flat prices rose 1.2 per cent.

Cash-over-valuation figures have not been available since that cash premium was taken out of resale negotiations on March 10.

OrangeTee head of research and consultancy Christine Li expects prices to fall by 5 to 7 per cent over the whole year. ERA expects a 5 to 8 per cent fall.

Prices could be stable by as early as the third quarter, said R'ST Research director Ong Kah Seng.

In the rental market, in contrast, both prices and volumes are heading south. An estimated 1,653 flats were rented last month, down 3.8 per cent from March.

The median monthly rent stayed at $2,300 for the fifth straight month. But the SRX's new rental price index shows a 1.1 per cent fall from March.

Experts said rents and volumes would stay low as curbs on foreign workers mean lower lower rental demand. ERA expects rents to fall another 5 per cent this year.
 

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HDB's estimate of third-quarter Resale Price Index drops 1.6 per cent
PUBLISHED ON OCT 1, 2014 11:38 AM


BY DAVID EE
SINGAPORE - The Housing Board released its flash estimate of the Resale Price Index (RPI) for the third quarter of this year on Wednesday. It was 192.5, a decline of 1.6 per cent over the previous quarter.

The RPI provides information on the general price movements in the resale public housing market. The transacted prices of individual flats can be found on the HDB's website.

The RPI for the full quarter and more detailed public housing data for the third quarter will be released on Oct 24.

In November, the HDB will offer about 4,290 Build-To-Order (BTO) flats in Sembawang, Sengkang, Tampines and Yishun. In addition, about 3,000 flats will be offered in a concurrent Sale of Balance Flats exercise.
 

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Four-room flats in Kallang Whampoa most popular in September Build-to-Order launch
PUBLISHED ON SEP 30, 2014 5:42 PM
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Four-room flats in the mature estate of Kallang Whampoa were the biggest draw in September's launch of new Housing Board flats, which ends at midnight on Tuesday. -- PHOTO: ST FILE

BY JANICE HENG
SINGAPORE - Four-room flats in the mature estate of Kallang Whampoa were the biggest draw in September's launch of new Housing Board flats, which ends at midnight on Tuesday.

At 5 pm on Tuesday, there were 3,642 applicants for 463 such Build-to-Order (BTO) units. Three-room flats and studio apartments in the same project saw 3.5 and 3.3 applicants per available unit respectively.

ERA Realty key executive officer Eugene Lim said the good response was expected. "The site's city fringe location, with riverfront facing and short walking distance to the Boon Keng MRT station are key reasons for its popularity," he said.

Mr Surya, 24, who declined to give his full name, was applying for a four-room flat in the area with his girlfriend. He said: "I feel it's closer to the central area. If you want to go anywhere, it's convenient." The technician was not put off by the stiff competition.

Flats in Bukit Batok, Hougang and Jurong West were also included in the BTO launch.

Apart from flats in Kallang Whampoa, the first-timer application rates were below 2.0, meaning most will get a chance to select a flat. "Going forward, it seems that the vast majority of first-timer demand has been largely satisfied, and as such the overall application rate may stabilise," said Mr Lim.

While two-room flats remain highly sought after by singles, demand for them also continues to cool. There were 11.1 singles chasing each two-room flat available to them, the lowest rate since they were able to buy new two-room flats in the July 2013 BTO.

The overall BTO application rate was 2.9, comparable to the rates for other launches this year, which range from 2.1 in the May BTO to 3.7 in the January one, including applications for studio apartments.

Some flat applicants could be waiting for the upcoming Sale of Balance Flats launch in November 2014, noted Mr Lim. "Also, many may be holding back to book the new flats at Tampines North that will be launched this November," he added.
 

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Five-room flat at Pinnacle@Duxton goes for record $1.06m
PUBLISHED ON APR 13, 2015 9:43 PM 1619 184 0 0


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Two five-room units at The Pinnacle@Duxton were sold for more than $1 million each in transactions completed this month, setting a new record. -- PHOTO: ST FILE


SINGAPORE - Resale prices for units at The Pinnacle@Duxton premium HDB project have set a new record, with two five-room units being sold for more than $1 million each in transactions completed this month.

One unit on the 28th to 30th floor was sold for $1.06m, while the other on the 46th to 48th floor fetched $1.05m, according the Housing Board website. The size of each unit is 107 sq m.

There were at least four other five-room units which were sold between $1m and $1.04m this year, according to Shin Min Daily News.

Four-room units are also popular, said the evening daily. At least six such units were each sold for $910,000 and above this year.


Units there are prized for their central location, and those on higher floors are known for their views, say property agents.

Transactions at The Pinnacle@Duxton have set new records after the first batch of owners fulfilled the five-year minimum occupation period in December last year and were allowed to sell their flats.

At the project's launch in 2004, new four-room flats were priced from $289,200 to $380,900, and five-roomers from $345,100 to $439,400.

As this is a unique, premium project, experts do not expect its sky-high prices to have much effect on the overall HDB resale market.
 
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