Was peering at a block of HDB flats in front of me one day when a thought suddenly struck me.
A 4-room HDB flat cost on average about $300k. A 12 storey block of flat has about 50 units. That translates to $15 million in value for a block of flats. Furthermore, these are all leasehold 99 years. Well, my point is, so what determines the value?
It seems that the system in Singapore is to take the latest transacted prices of nearby properties to determine the approximate value of the property in consideration.
To make things worse, there is Cash Over Valuation (COV). If the valuation is wrong, shouldn't it be amended to reflect its true value? Properties should be transacted at their valuations and the COV paid to the owners directly without affecting transacted prices, which will ultimately affect surrounding property values. The COV will need to be ......
Hi Lau,
A reader pointed out that there is an error in your calculation – a block of 50 units 4 rm flat at 300k per unit should be 15 mil and not 1.5 mil.
Yelp. Readers r so alert. :)
It was still in a semi draft stage when I posted it last night.
I actually updated the amendment this morning already.
Thanks.