Impact of the revised procedure for HDB Valuation report

NewsMarch 10, 2014
Share:

As discussed in today’s parliament, MND released the latest adjustment in order to place various initiatives to improve the longer-term real estate market stability. To encourage buyers and sellers to focus on the sum total of flat price, with effect from 5pm 10 March 2014, HDB will only accept valuation requests from resale flat buyers (or their appointed salesperson), after the buyers have been granted an Option to Purchase (OTP) by flat sellers. And under this new rule, buyers who are granted OTP will also have 21 calendar days, instead of 14 days to exercise the OTP to adjust to this new procedure.

“Using valuation and negotiating based on COVs has been a long-standing practice for the sale and purchase of HDB resale flats. With this revised procedure, the possible impact of allowing valuation only after the OTP is granted, will expose HDB homebuyers to a higher vulnerability of a greater cash outlay if there is any gap between the agreed price and the valuation price. Buyers will become more cautious in their offer price as they enter into a purchase without an indication of how much the property is worth. In comparison, for the purchase of a private property, buyers do get an indicative valuation from the banker before entering into an option and in most instances, banks do honour the valuation based on indicative prices given” commented Mr Ismail, CEO of PropNex Realty.

“This new procedure will take some time to adjust as the market moves away from the use of COV as the yardstick in negotiations. In those estates where the Cash-over-Valuations (COVs) are still holding high, especially in central locations like Redhill, Bishan or Toa Payoh, buyers and sellers are likely to continue to rely on the valuation of other sources for their price negotiations as such information are still going to be made available by property portals and other platforms,” concluded Mr Ismail.

“HDB resale prices are expected to further dip as potential buyers take a cautious approach in their negotiations before they ink the Option to Purchase. In 2013, HDB for the first time after 8 years saw a negative growth of 0.6%. This trend will continue, with HDB resale prices expected to drop by 5 to 8% in 2014,” remarked Mr Ismail.


For media enquiries, please contact:

Carolyn Goh
Corporate Communications and Marketing Manager

Suggested Reads

Upcoming Events

View more

You may like

PropNex Partners with BYD to Drive a More Sustainable Future & Extends Sponsored Health Screening to all 13,600* Self-Employed Salespersons

July 21, 2025

Developers' Sales Eased In June On Limited New Project Launches During The School Holidays; Primary Market To Get Lively In July And August

July 16, 2025

PropNex Marks 25th Anniversary With Over $30m In Community Initiatives, Launch Of New Book And A New CEO

July 15, 2025

PropNex's Consumer Survey Shows 7-In-10 Respondents Do Not Expect Home Prices To Fall In Next 12 Months; Easing Interest Rates Seen As Motivation To Buy A New Home By Half Of Those Polled

July 11, 2025

PropNex's Comments On The Revision To The Seller's Stamp Duty (SSSD) On 4 July 2025

July 04, 2025

Private Home Prices And HDB Resale Flat Prices Rose At A Slower, More Sustainable Pace In Q2 2025, Flash Estimates Showed

July 01, 2025