Official Valuation

Officially registered Property valuator in the city hall of Szeged

Why Checking the Valuation of a Property is Vital

Obviously, you don’t want to be caught in a scenario like the above – retired with minimal income and facing the possibility of being evicted (or at least being forced to downgrade).

But checking on the valuation of the property you’re buying is important for a few other reasons:

It impacts the maximum loan you can take out. Whether you’re getting a loan from HDB or a bank, your loan will be capped at a percentage of the official valuation figure.
It impacts the amount of cash you’ll need to pay. A purchase price far above the valuation means you can’t use CPF to cover everything – you’ll have to make up for the difference in cash.
It impacts your future Return on Investment (ROI) if you ever plan to sell or upgrade your home. You want to buy low and sell high – not buy high and sell low.

How is Property Valuation Calculated?

Valuation professionals typically use a few methods to come up with property price estimates. Very briefly, these are:

The Comparable Sales Method, where the valuer will look at recent transactions in the vicinity and make adjustments for differences in location, floor areas, age, condition, tenure, design and layout, dates of transaction, and prevailing market conditions.
The Income Method, where the valuer estimates the income stream from the property and then converts it into a market value amount. This is generally only used for investment or commercial properties.
The Cost Method, where the valuer estimates the property price based on the cost of land plus cost of construction, less depreciation. This is usually used for properties with few to zero market transactions, such as schools and churches.