Artificially inflated HDB flat prices

[Wt_know]

Well done Patrcik !

June 17, 2008

 

Valuation the culprit in artificially inflating HDB flat prices

 

OVER the past 18 to 24 months, HDB resale property prices have shot through the roof and many lower-income families have been priced out of the market. Although this is partly driven by the shortage of HDB flats and increased demand, what is not apparent to many people is the manner in which valuations have artificially fuelled inflation.

Take the three-room flat, for example. This is the smallest HDB flat and is targeted at the lower-income group.

 

Between March and May, prices of a three-room flat in Yishun, in the same block and with the same floor area, have shot up by between $18,000 and $30,000. The price of a similar three-room flat in Ang Mo Kio ranges from $184,000 to $300,000 in the same period. Similar trends are observed in almost every estate and in almost every flat type.

 

I accept that several factors may account for the differential in the value of a property, but is it realistic to expect the valuation of the same type of flat in the same block to have risen by 10 to 50 per cent over a short three month period? Even if the interior renovation of a unit is particularly good, could it account for such a difference? And why does the trend keep increasing? A check with several properties in the weekend classifieds shows that the valuation of similar properties in these locations has gone up by at least another $10,000 since the last transacted prices last month. What can justify the drastic increases?

 

A three-room flat in a choice location, such as Bishan and Ang Mo Kio, now costs more than $300,000. A two-bedroom private apartment in an older development costs only slightly more - a clear sign that HDB flats are over-priced and out of reach for some lower-income families.

 

It seems that, in valuing a property, the valuer takes the last transacted price as a benchmark. Since the last transacted price includes the cash top-up sellers usually demand from buyers, the value of the property is artificially inflated.

 

Past experience in Singapore and Britain shows that when property prices are artificially inflated by valuation, sooner or later, prices will crash and many people will suffer.

 

The HDB should bar inclusion of the cash top-up in valuations.

 

Patrick Tan

Edited June 17, 2008 by Wt_know

[Mustank]

life is very hard nowadays

 

people want to stay in established towns or live near cbd area to cur traveeling time and cost

 

but there is not enough housing in such areas

 

poor patrick is "forced" to take jurong west extension

 

which is only good for people who work in jurong

 

what cant they decentralise the cbd area into sateliitle towns

[Typhoonz]

Then see what crap will BT Mah say now lor...

[Kingcopa]

What u expect him to say? I reckon he will give some crap excuse n siam the qns without ans it. That is their usually style.

[Typhoonz]

I don't expect him to say anything that makes sense, just want to hear what crap excuse he has or what rebuttal he'll give...

[Kingcopa]

well sit tight n get ready for his crap.

Mayb he will say "u dun really need to stay at AMK Bishan or TPY what, Jurong n Sengkang got alot of cheap flat what."

Edited June 17, 2008 by Kingcopa

[Sabian]

Poor Patrick wants the goberman to fix the price for him.boo hoo.

 

What happens when Patrick is on the other side of the fence as a property owner?

Ask the goberman to fix it one more time cos now it appears spoilt again from his viewpoint?

[Typhoonz]

I think he'll say something along that line... Maybe he has an excuse for anything you can think of...

 

I mean he's quite seasoned at this liao mah...

Edited June 17, 2008 by Typhoonz

[Kingcopa]

Mayb thy even have a standard template for this sort of qns. Just need to refer to it

[Ahyoo2002]

Is Jurong and Sengkang cheap?

[Typhoonz]

I'm sure they have... They always want to be politically correct... To themselves at least...

[Dc5r]

Yah!! This is what an agent told me...

 

I was like WTF??? Does that mean if an idiot pay 400k for a 5room flat at Jurong West then Jurong west 5 room in that area will be valued around 400k? His answer is YES!!!

 

I did realise that those 5room flat in Bukit Panjang that was valued in March is around 290k. Those done in May is 300k (Be it 2nd floor, 4th floor, 9th floor) all 300k.

And guess what... the latest transacted price in the area is averagely 300k in the past 2 months... This is really a stupid way to value a house.

 

Anyone who don't believe can go to any 5room flat in Bukit Panjang to have a look...all valuation done after April are 300k be it 2nd floor or 10th floor.

 

Valuer simply come take photo and put 300k in the report... easy $$$

 

Or is it the work of Housing agent or even the Housing Deaprtment behind it to hold HDB resale price

 

[Kingcopa]

if u compare to AMK, TPY. It is consider cheap

 

Now seller is asking for crazy cash. JW 4 rm asking for 30-45k cash. Siao

[Mustank]

want to sabo your neighbour ?

 

sell your flat to your son at $1

 

next day, all your neighbour will come with a chopper in hand

[Dc5r]

Hahahahaha....

 

But that will pose another problem... Where am i going to find so much $$$ to top up the balance loan???

 

Garment not so stupid one.... we are under their mercy the whole life!!!

 

For those fully paid bro...maybe can do that... heehee

[Dc5r]

But i don't think they will follow la....

 

Garment always like that.... just like Petrol company...

 

Price goes DOWN... they stay put.

Price goes UP... They UP UP UP!!!

[Ahyoo2002]

I think they are forcing people to use up all their saving on paying the housing loan

[Dc5r]

Garment wants to make you commit high high.... then suck dry your CPF for the next 20-30 yrs...