Stupid valuation question

[challenger]

A person wants to sell his property. The bank values the property at $1.5 million from historical transaction, and the person list it for sale at $1.5 million. After 3 months, nobody is willing to buy the property at that price. Should the property valuation stay at $1.5 million, or should it be adjusted downwards to more accurately reflect its true value?

Now, supposing this person is a company, a developer, who have all these unsold units. Does it make logical sense for the property valuation price to be adjusted downwards? From a business point of view, if you can only take 50% loan, the bank cannot lose. But something about this valuation process does not seem right.

[Arcachon]

The valuation is not stupid, it is correct.

The valuation reflect the market willing to buy and sell.

They use to have stupid HDB valuation which is control by HDB.

1995 when I was selling my 4 Room HDB at Kim Keat Ave, my HDB valuation was SGD 195,000 and I sold my unit for SGD 285,000. This is call Stupid Valuation.

Now HDB have allow HDB resale at market value, you just need to wait and see how HDB resale going up, soon it will be psf instead of Total value.

Presently the value is not going down because it is controlled by Control Measure by MAS and not due to oversupply, under demand, economic crisis, Job losses etc.

Remove all the CMs and the valuation is too low.

[ay123]

agreed the so call "market downturn" now is due to CMs and not real crisis. if govt remove the CMs, the price sure shoot up high. but now another potential crisis MERS is quite scary. it may turn out to be SARS II

[Arcachon]

SAR happen and nobody know what is happening, MERS is nothing.

A visit to Singapore Hospital and you will know why MERS is nothing.

[challenger]

The valuation is not stupid, it is correct.

The valuation reflect the market willing to buy and sell.

They use to have stupid HDB valuation which is control by HDB.

1995 when I was selling my 4 Room HDB at Kim Keat Ave, my HDB valuation was SGD 195,000 and I sold my unit for SGD 285,000. This is call Stupid Valuation.

Now HDB have allow HDB resale at market value, you just need to wait and see how HDB resale going up, soon it will be psf instead of Total value.

Presently the value is not going down because it is controlled by Control Measure by MAS and not due to oversupply, under demand, economic crisis, Job losses etc.

Remove all the CMs and the valuation is too low.


I am not saying valuation is stupid. I am saying it may be silly question. But still ask lah. Forum too quiet lately.

Yes valuation reflect the market willing to buy and sell. If nobody willing to buy at valuation price, then maybe valuation price is too high. That is more scientific. To estimate property price without cooling measure is just plain guessing. Besides, we don't know which are the permanent cooling measure and which are the ones that may be removed.

[Arcachon]

TDSR is not going away.

https://propertysoul.files.wordpress.com/2013/07/faqs-on-masc3a2e282ace284a2-total-debt-servicing-framework-for-property-loans-and-refinements-to-housing-loan-rules.pdf

A1 The rules introduced by MAS, namely, the Total Debt Servicing Ratio (TDSR) framework and refinements to MAS’ existing housing loan rules, are structural in nature and meant for the long-term.http://www.sgmoneymatters.com/wp-content/uploads/2014/02/Singapore-Property-Price-Index-and-STI-2014-01.png

[teddybear]

Ai yoh, the CMs will only be removed when the propery market crashed!

But hor, when property market crash, who is to be blame hah? MAS or MND since both came out with a slew of property market cooling measures?????? :suspicion:


agreed the so call "market downturn" now is due to CMs and not real crisis. if govt remove the CMs, the price sure shoot up high. but now another potential crisis MERS is quite scary. it may turn out to be SARS II