Your search results

The Sneaky Role of Property Appraisals in Shaping Singapore’s Home Prices

Posted by Jayson Ang on January 20, 2024

| 0

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 …

All Buying Tips

Multiple Property Ownership in Singapore: A Different Landscape in 2025

Jayson Ang – July 22, 2025 –

TLDR Owning multiple properties in Singapore in 2025 is tougher due to higher Additional Buyer’s Stamp Duty (ABSD), stricter Loan-to-Value...

All Blog Posts Opinion

5 Reasons Why You Should Consider Hiring an Agent Instead of DIY-ing It

Jayson Ang – June 9, 2023 –

TLDR Understanding the complexities of the real estate market and transactions can be overwhelming. Enlisting the help of a real...

Mandarin Top 5

Top 5 Secrets : Foreign Investors Are Rarely Told About Singapore’s Real Estate Market

Jayson Ang – November 19, 2024 –

Singapore's real estate market has been a popular choice for foreign investors due to its stable economy, strategic location, and...

All Opinion Reports

NUS Real Estate Survey Reveals Growing Optimism Among Industry Leaders

Jayson Ang – January 17, 2025 –

TLDR A recent survey by the National University of Singapore (NUS) highlights increasing optimism among real estate industry leaders. The...

All Buying Tips Opinion

Three Singaporeans Share Their Experiences of Co-Owning a Property with Friends

Jayson Ang – March 18, 2025 –

TLDR In Singapore, some individuals venture into property investments with unrelated partners, driven by opportunities and personal circumstances. Jim, leaving...

All Buying Tips Opinion

5 Techniques for Identifying Undervalued Properties in Singapore 2023

Jayson Ang – August 23, 2023 –

TLDR To spot undervalued properties in Singapore's real estate market, focus on market value, location, and unique features. Consider "up...

Mandarin Top 5

The 5 Secrets To Successful Singapore Property Investing Revealed

Jayson Ang – July 4, 2024 –

The vibrant property market in Singapore has attracted numerous investors and speculators looking to profit from the nation's thriving conditions....

Mandarin Top 5

Top 5 Tips : How Investors Protect Themselves From Risk And Capitalize On Emerging Opportunities In Singapore’s Real Estate Landscape

Jayson Ang – April 27, 2025 –

The real estate landscape in Singapore has always been a lucrative investment opportunity for both local and international investors. However,...

Mandarin Top 5

Top 5 Factors : Buying Resale vs New Launch Property in Singapore: Which is Better?

Jayson Ang – November 3, 2024 –

The decision to invest in a property in Singapore can be both exciting and daunting, especially when faced with the...

All Buying Tips Opinion

The Sneaky Role of Property Appraisals in Shaping Singapore’s Home Prices

Jayson Ang – January 20, 2024 –

TLDR When it comes to the real estate market in Singapore, understanding property valuations and the impact on mortgage loans...

All Blog Posts Buying Tips

Discover How The CPF Accrued Interest Can Impact Your Property Sale Proceeds

Jayson Ang – April 12, 2023 –

Singaporeans are renowned for being smart and savvy - especially when it comes to selling their homes, whether it's an...

Mandarin Top 5

Top 5 Surprising Benefits of Investing in Singapore Real Estate for Foreigners

Jayson Ang – October 27, 2024 –

Singapore, a thriving city-state in Southeast Asia, has become an attractive destination for foreign investors looking to diversify their investment...

All Blog Posts Opinion

Discover 5 Reasons Executive Condominiums Could Prove To Be A Smart Investment Despite Growing Inflation

Jayson Ang – January 22, 2023 –

TLDR An overview of the article discussing the benefits of Executive Condominiums (ECs) over private condos in the current real...

All Buying Tips Selling Tips

Singapore Homebuyers: Finding Hidden Value in ‘Undesirable’ Property Traits

Jayson Ang – June 15, 2025 –

TLDR Many perceived drawbacks in Singapore’s property market—such as mortgage lock-ins, leasehold status, west-facing units, nearby construction, inefficient spaces, and...