Debated in Parliament on 16 Oct 2012.
Mr Baey Yam Keng asked the Minister for National Development (a) how the bases of computation for HDB flat valuation compare across flats for resale, SERS and compulsory acquisition; (b) how the Ministry views the increasing cash over valuation (COV) figures; and (c) how can the system be fine-tuned to make resale flats more affordable.
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Sir, the basis of valuation is the same for all HDB flats, whether they are resale flats transacted in the open market, flats affected by the Selective En bloc Redevelopment Scheme (SERS), or flats that are compulsorily acquired. Their values are assessed by a panel of professional valuers based on established valuation principles, taking into account factors such as location, size, storey height, and the extent of renovations.
Cash-Over-Valuations, or COVs, refer to the cash amounts which resale flat buyers pay above the market valuations to secure the purchase. With COV, the buyers are paying above the value as assessed by professional valuers. In a seller's market, this can happen. HDB has always advised buyers to think carefully before commiting to a price which is substantially above what the professional valuers have estimated.
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Resale prices are determined by willing buyers and sellers. The Government cannot intervene to determine the transaction prices for buyers and sellers. But we help players make informed decisions through timely release of pricing data via the HDB website.
Buyers are naturally anxious about the rise in HDB resale prices in recent years. This is due to a temporary mismatch in supply and demand, coupled with global liquidity, low interest rates, and strong economic growth in Singapore. To restore market equilibrium, the Government has already put in place a number of demand management and supply measures. We will continue to monitor the public housing market closely.
Mr Baey, keep it short.
I would like to ask Minister if valuers look into past transacted prices to determine the valuation price, and if these transacted prices include the COVs? If so, would that artificially prop up the resale flat prices? May I ask why is there no COV practice in the transactions of private properties?
Valuers look at evidence of selling price. Selling price would, of course, be the final price that the buyer pays to the seller. And if it exceeds valuation, then it includes COV.
Order. End of Question Time.
[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 16-19, 21, 23-25, 30, 32-33, 35-36, 38-39, 41-42, 44, 46 and 48-49 on the Order Paper are reproduced in the Appendix (Pg 1004-1021). Question Nos 20, 22, 26-29, 31, 34, 37, 40, 43, 45, 47 and 50 have been postponed to the next available sitting of Parliament.]
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