HDB Resale Seminar -

Understanding Real Estate

Valuation
by Singapore Institute of Surveyors and Valuers (SISV)

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 Agenda

▪ Singapore Institute of Surveyors & Valuers

▪ Valuation & General Practice Division
▪ SISV Dispute Resolution Centre
▪ Real Estate Valuation
▪ Valuation Process
▪ Methods of Valuation

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 Singapore Institute of Surveyors & Valuers
SISV is the national body representing professionals in the
real estate and building industry with Valuation & General
Practice (VGP), Land Surveyors (LS) and Quantity
Surveyors(QS) Division

SISV’s objectives -
 To advance and facilitate acquisition of knowledge in the
surveying, valuation and general practice professions
 To promote general interests of professions and to
maintain and improve their usefulness and relevance for
benefits of the public
 To regulate standards of the professional conduct and
improve practice of its members 3
Valuation & General Practice Division
The Valuation & General Practice (VGP) Division
of SISV comprises:

 Property Valuers
 Property Agents
 Property Consultants
 Property Managers
 Building Surveyors
 Business Valuers
 Intellectual Property Valuers
 Plant and Machinery Valuers
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 Other Services by SISV
▪ SISV Dispute Resolution Centre
- Approved CEA’s dispute resolution centre for
a) Mediation (mediator facilitates
discussion between disputing parties to
settle their dispute) or
b) Arbitration (arbitrator decides for the
disputing parties)

• Property portal
www.nationproperty.sg
• A one-stop property listings portal
• For both buyers and sellers
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Real Estate Valuation

• Valuation Concepts

• Definition of Market Value

• Valuation Process

• Methods of Valuation

• Comparison Method for Valuation of HDB

Resale Flats

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 Valuation Concepts
Price
 Amount asked, offered or paid for a good or
service
 A historical fact
Value
 Worth of a good or service – an estimate
 An economic concept depending on demand
and supply

Price may or may not be equal to Value

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 Definition of Market Value

Market Value is the estimated amount for

which a property should exchange on the date
of valuation
➢ between a willing buyer and a willing seller
in arm’s length transaction after proper
marketing
➢ the parties acted knowledgeably, prudently
and without compulsion

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 Valuation Process

inspection
Analysis of
of property
Appointed to value a information and
and
property preparation of
information
valuation report
collection

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 Methods of Valuation
▪ Comparison Method
- Applicable for more homogeneous properties
such as HDB flats, private apartments, shop
units etc..
▪ Income Method
- For income producing properties e.g. office
block, shopping mall etc.
▪ Cost Method
- For specialized properties, e.g. shipyards

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 Comparison Method of Valuation

• Most commonly used:

• Adequate number of transactions of
comparable properties e.g. HDB flats/
private apartments/ condominiums
• Adopted the Principle of Substitution
Basic Premise : A typical prudent person will
not pay more for a property than it would
cost to purchase a comparable property
with similar features

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 Key Features for Comparison

 Resale registration date

 Floor area and level
 Finishes and fittings
 Condition
 Location (proximity to MRT/ amenities/ places of
worship, view of sea/ garden/ lake, same
precinct, same block)
 Age of flat
 Unexpired lease term
 Undergone various improvement programmes
e.g. Main Upgrading, Lift Upgrading, Home
Improvement Programmes and so forth.
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 Selection of Comparables

 What would potential buyers consider when

buying a property e.g. location, floor area,
level, age of flat, improvements carried out?
 Look for market transactions i.e. arm’s length
transactions
 Choose very similar comparables which would
reduce need for adjustments

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 Selection of Comparables

 What would potential buyers consider when

buying a property e.g. location, floor area, level,
age of flat, improvements carried out?

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 Data Collection

Source of Data : HDB

For public, HDB has published information on resale transactions

https://services2.hdb.gov.sg/webapp/BB33RTIS/BB33PReslTrans.jsp 15
 Example of Analysis of a 4 Rm HDB Flat to
Determine the Value
Subject Property HDB Flat A HDB Flat B HDB Flat C
500 m from MRT 100m from MRT 500m from MRT 1km from MRT
Location
Station Station Station Station
Size (m2) 91 101 91 101
Storey 5th 13th 3rd 2nd
Condition Average Average Good Fair
Completed 1996 1996 1996 1996
Transacted Price $380,000 $310,000 $295,000
Date of sale Sep-20 Sep-20 Aug-20
Rate ($psm) $3,762 $3,407 $2,921

Adjustments
Location -5.00% 0.00% 5.00%
Size 1.00% 0.00% 1.00%
Floor level -5.50% 1.00% 1.50%
Condition 0.00% -5.00% 5.00%
Total Adjustments -9.50% -4.00% 12.50%
Adjusted Rate for subject property $3,405 $3,270 $3,286
$309,850 $297,600 $299,016 16

Average for Subject property $302,156

 Thank You

110 Middle Road #09-00

Chiat Hong Building
Singapore 188968
Tel : 62223030
Email: janet@sisv.org.sg
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