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 …

Mandarin Top 5

Top 5 Coffee Shops in Singapore for Coffee Lovers

Jayson Ang – August 17, 2024 –

Singapore, a bustling city-state known for its diverse culture and vibrant food scene, has also become a haven for coffee...

Mandarin Top 5

Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?

Jayson Ang – November 17, 2024 –

Singapore's property market has been a hot topic of discussion for many years, with its resilience and growth attracting both...

Mandarin Top 5

5 Pros of Buying a New Development

Jayson Ang – March 3, 2024 –

Deciding whether to buy a new development or a resale property can be a challenge. In the next few video...

Mandarin Top 5

Top 5 Parks and Nature Reserves to Visit in Singapore

Jayson Ang – February 26, 2024 –

Singapore, often referred to as the "Garden City," is a vibrant and diverse nation that has made significant strides in...

All Opinion

The 99-to-1 Property Split Strategy: Legality and Risks

Jayson Ang – May 15, 2026 –

TLDR The 99-to-1 property ownership split in Singapore, where one spouse holds 99% and the other 1%, is used to...

Mandarin Top 5

Navigating the Singapore Property Market as a Foreign Investor: What You Need to Know

Jayson Ang – August 7, 2024 –

Singapore, a thriving hub of business and commerce in Southeast Asia, boasts a highly developed economy and a robust real...

Mandarin Top 5

Top 5 : Long-Term Economic Impacts Of Foreign Real Estate Investment In Singapore’s Luxury Condo Market?

Jayson Ang – December 19, 2024 –

Singapore has long been a preferred destination for foreign real estate investors, particularly in the luxury condo market. The city-state's...

All Buying Tips Opinion

2-Bedroom vs. 2+Study Units: A Decade of Performance Analysis

Jayson Ang – May 21, 2026 –

TLDR Over the past decade, 2+Study units (compact 3-bedroom layouts) consistently outperformed standard 2-bedroom units in resale gains across most...

All Opinion

Housing Affordability in 2023: Is Singapore Property Truly Unaffordable?

Jayson Ang – November 4, 2023 –

TLDR Singapore’s property market faces challenges with high prices, especially in private housing. While public housing remains more affordable, the...

All Buying Tips

What is Your Next Step in the Property Market?

Jayson Ang – December 7, 2022 –

When you flip open the papers or turn on the news nowadays, the common buzzwords are "INFLATION", " INTEREST RATE...

Buying Tips Mandarin Top 5

5 Qualities to Look for in an Agent to Ensure a Smooth Transaction

Jayson Ang – June 23, 2023 –

5 Qualities to Look for in an Agent to Ensure a Smooth Transaction Here are 5 qualities to look for...

Mandarin Top 5

5 Factors : Why Now Is The Perfect Time To Invest In Singapore Property

Jayson Ang – May 12, 2024 –

Investing in property is an excellent way to build wealth and secure a stable source of passive income. If you...

All Buying Tips Opinion

Property Unpacked: Is GLS Impacting Property Values?

Jayson Ang – March 2, 2025 –

TLDR The Government Land Sales (GLS) program in Singapore is critical for developers to obtain development land, with sites released...

All Buying Tips Opinion

Bayshore: Reinventing the Experience of Living by the Beach

Jayson Ang – May 4, 2024 –

TLDR When deciding on buying or selling property in Bayshore, consider the recent developments and potential future growth. With a...

Mandarin Top 5

Top 5 Reasons : Why Penthouses In Singapore Are Popular With Crazy Rich Asians

Jayson Ang – October 7, 2024 –

Singapore, a city-state known for its stunning skyline and luxurious lifestyle, has become a popular destination for the ultra-wealthy. Among...

All Blog Posts Opinion

Revival of Singapore Luxury Housing Market in 2023

Jayson Ang – January 21, 2023 –

TLDR The property market in Singapore has witnessed significant shifts in the past two years, with a surge in prices...

All Opinion

The Johor-Singapore Special Economic Zone: A New Chapter, Not Just “Iskandar 2.0”

Jayson Ang – April 26, 2026 –

TLDR The Johor-Singapore Special Economic Zone (JS-SEZ), launched in January 2025, is a bilateral effort aimed at sustainable economic growth...

Mandarin Top 5

5 Impacts Of The Singapore-Malaysia High-Speed Rail On The Property Market

Jayson Ang – June 10, 2024 –

The proposed Singapore-Malaysia High-Speed Rail (HSR) is a joint project between the two countries that aims to improve connectivity and...

Mandarin Top 5

Top 5 : Benefits of Investing in Older vs. Newer Singapore Property Market Condos for International Buyers?

Jayson Ang – January 14, 2025 –

Singapore's property market has long been an attractive investment destination for international buyers, offering a stable and well-regulated environment with...

All Buying Tips Opinion Selling Tips

The Importance of Caution Regarding Property Oversupply in Singapore

Jayson Ang – March 10, 2025 –

TLDR Recent challenges in China's real estate sector reveal valuable lessons for Singaporeans, emphasizing the importance of understanding governmental interventions...