Avoid The Possibility Of Negative Cash Sales: Find Out How Much Your HDB Has To Appreciate To Steer Clear Of It!
TLDR When selling your property, watch out for negative cash sales that could leave you with no money after CPF...
Read More
TLDR
When it comes to the real estate market in Singapore, understanding property valuations and the impact on mortgage loans is crucial. Property valuations can be subjective, influenced by recent transactions and bank valuations. Higher valuations can lead to higher loan amounts but also impact property prices. It’s essential to consider the implications of accepting a higher valuation, including increased interest rates and stamp duty. Timing is key in property investments, and it’s important to assess individual circumstances before deciding to buy or sell. Consulting experts for strategic real estate advice and connecting with potential buyers can help navigate the complex real estate market in Singapore effectively.
At times, it feels less like a precise science and more like tossing a set of tarot cards into a spinning fan, then trying to interpret whatever lands near you.
Take, for example, when you’re hunting for a mortgage. You’ll see that some banks think your property is worth more, while others think it’s worth less. Some figure it out on their own, while others lean on the expertise of external valuation companies (I learned this the hard way when I had to cough up $700 for such a service during my last refinancing).
Property valuation isn’t as concrete as physics; there’s no one-size-fits-all rule. For instance, there’s no guaranteed equation to calculate the difference in value between a higher or lower floor, or how much extra a 3.2-meter ceiling height is worth compared to the standard 2.6 meters.
With individual sales happening sporadically, the price can fluctuate as wildly as a bar in Orchard Towers on a Friday night.
So, what’s the real deal with that last price surge? Is it an accurate reflection of the item’s worth? Well, who can tell?
Perhaps the transaction right before this was a parent cutting their kid a sweet deal, which would mean that the price was way off. Or, on the flip side, the latest buyer might be one of those people who breakfast on Bird’s Nest soup and doesn’t mind paying a little extra.
But here’s the real head-scratcher: who decided what the thing was worth, and how did they come up with that amount?
Without a history of past prices to go by (which some folks already think is pretty shaky), working out how much something’s worth can get really subjective. Even the big companies that try to put a number on everything (like, they’ve got some fancy formula to work it all out) probably couldn’t tell you why they ended up with the number they did.
I can see why people are hesitant about sharing how they come up with these figures. Nobody’s going to pay for a valuation that starts with: “We kinda think it’s maybe worth $X,” and no bank wants to admit “We based the loan on a hunch, give or take.”
Alright, let’s cut to the chase. Most of the time, figuring out the value of a property boils down to the latest prices paid at the place. If a few recent buyers shelled out more cash than usual (not worrying about bank valuation), it’s like hitting a jackpot for you, as your property valuation shoots up.
Shopping around for a home loan can feel like navigating through a maze, right?
The part I absolutely loathe about getting a bank loan is haggling over the property valuation. Sure, you can try to push for a higher value so that you can borrow more. Or maybe have your mortgage broker on the lookout for banks ready to play ball with a higher valuation.
But here’s the snag. These valuations indirectly impact property prices. If a bank is gunning for bigger home loan targets for the month, voila, property prices climb up.
Sometimes, it can feel like you’re stuck between a rock and a hard place. For instance, you might find yourself comparing mortgage packages from Bank A and Bank B. Bank A might offer a deal with 3M SORA + 0.7%, while Bank B’s package includes 3M SORA + 0.9%. But guess what? Bank B is ready to agree to a valuation that’s $50,000 more. This might tempt you to take up their higher rate.
Home loans are pretty much all the same apart from the interest rates. So, when the loan package seems a bit too expensive, some banks try to reel in borrowers by accepting higher valuations. I’ve seen many homeowners who have bitten the bullet and gone for terrible loan packages just because they were dazzled by the high valuation.
If you’re on the hunt for a mortgage, I’d suggest taking a hard look at the extra interest you’ll be shelling out and your increased stamp duty rates before making a beeline for the highest valuation.
And oh, don’t forget that stamp duties like BSD and ABSD are calculated based on the higher of the selling price or valuation.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
5 Key Insights to Take Away from the Latest 2022 Cooling Measures
TLDR Affordability of HDB Market: Government is focused on ensuring affordable public housing and may increase supply if needed. Long-term...
Read More
5 Smart Techniques That Resourceful Homebuyers Utilize to Overcome Restrictions on Home Loans
TLDR When it comes to navigating the complex world of home loans and property acquisition, it's crucial to be aware...
Read More
Discover the 3 Top Factors Impacting HDB Resale Valuation in Singapore: What Every Buyer Must Know!
TLDR The blog post discusses the increased demand for HDB resale flats and the impact on prices. It emphasizes the...
Read More
5 Things to Know About Singapore’s Urban Redevelopment and Landscape Changes
As one of the world's most densely populated cities, Singapore has undergone significant urban redevelopment over the past few decades...
Read More
A Beginner’s Guide to Homebuying: How to Choose the Perfect Property
TLDR When considering property investments, understanding your motives is crucial. Factors like accessibility to amenities, remaining lease, transaction history, rentability,...
Read More
Lessons from the Rollercoaster Ride: Homebuyers Share Their Singapore Housing Market Experiences
TLDR The Singapore housing market is a rollercoaster of unpredictable changes. Three homebuyers share their experiences: Tristan waited too long...
Read More
Where to Find the Most Affordable New Launches in 2023 – Starting at $1.31 Million
TLDR When looking for an affordable new launch condo in Singapore as of January 2023, consider projects like 10 Evelyn,...
Read More
Why The URA Master Plan Matters For Your Property’s Potential
TLDR The URA Master Plan entails significant shifts like the relocation of Paya Lebar Airport or creation of Punggol Digital...
Read More
When a Property Seller Pulls Out of the Deal : What Now?
TLDR When a property deal is not yet formalized, sellers can withdraw without consequences. However, once an Option to Purchase...
Read More
Five Pitfalls of Selling a Home for the First Time
TLDR When selling your first home, avoid holding out for a better offer as it may backfire. Let your agent...
Read More
5 Tips : How To Choose The Right Property Agent To Help With Your Singapore Property Investment
Choosing the right property agent is crucial to the success of your Singapore property investment. A good agent can provide...
Read More
Unlock The Key To Selling A Home With A Perceived Disadvantage Like Being West-Facing Or Close To A Rubbish Chute – Here’s How!
TLDR When selling your house, turn perceived disadvantages into advantages. For sun-facing homes, use UV sheets and blinds to manage...
Read More
Discover How The CPF Accrued Interest Can Impact Your Property Sale Proceeds
Singaporeans are renowned for being smart and savvy - especially when it comes to selling their homes, whether it's an...
Read More
5 Qualities to Look for in an Agent to Ensure a Smooth Transaction
5 Qualities to Look for in an Agent to Ensure a Smooth Transaction Here are 5 qualities to look for...
Read More
Top 5 Shopping Malls in Singapore for Luxury Shopping
Singapore, a bustling city-state known for its stunning architecture and diverse culture, is also a paradise for luxury shopping enthusiasts....
Read More
Reach Your Goal of Owning a Flat Before You Turn 35 : Money-Saving Strategies
TLDR Jayson Ang provides valuable insights on money-saving strategies to achieve the goal of owning a flat before turning 35...
Read More
Top 5 Places to Try Durian in Singapore
Durian, often referred to as the "King of Fruits," is a unique and polarizing delicacy in Southeast Asia. With its...
Read More
HDB Market Outlook 2023
TLDR: Understanding the HDB Market Outlook 2023 The HDB resale market showed resilience in 2022, with significant growth in sales...
Read More
Exploring the Resale Condo Market? Here’s What to Watch Out For!
TLDR The impact of COVID-19 on Singapore's real estate market has been significant, leading to a surge in demand for...
Read More
