HDB Valuation: How Do I Figure Out How Much An HDB Flat is Worth?
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HDB Valuation: How Do I Figure Out How Much An HDB Flat is Worth?

profileKenneth Fong
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Are you a buyer looking to buy the perfect HDB Resale flat?

Or perhaps you’re a potential seller thinking of selling your HDB flat?

Mr Krabs Putting Money into the Cash Register
Source: SpongeBob SquarePants | Giphy

You’ll probably want to know how much the HDB flat that you’re planning to buy or sell is worth.

Even if you’re not buying or selling, it’s not a bad idea to get a sense of whether your flat might appreciate in price.

Or to get a sense of whether a potential dream estate where you wanna live in in the future is within your financial reach.

So how do you figure that out?

I gotchu, bruv.

HDB’s Valuation of an HDB Flat

When it comes to buying or selling an HDB flat.

An HDB valuation is the only official way you can find out how much an HDB Resale flat is worth.

It will also be the basis for determining how much HDB Housing Loan or CPF you can use to fund the purchase

In order to get an HDB valuation, the buyer and seller must first agree on a selling price.

Once the seller grants the buyer the Option to Purchase (OTP), which is a sum between $1 to a maximum of $1,000 (to be negotiated between buyer and seller).

The buyer can then submit a Request for Value to arrange for HDB appointed valuers to inspect the seller’s HDB flat.

FYI: the processing fee for each Request for Value is $120 (GST inclusive)

Once the valuation is done, HDB will not accept another Request for Value of the same flat from the same buyers or other different buyers, until the OTP expires.

I know what you’re thinking…

“Is there a way for me to find out the value of the flat BEFORE I involve HDB?”

A bit of a chicken and egg problem huh?

So… How Do I Figure Out How Much an HDB Flat is Worth?

Prior to 2014, a seller and buyer would decide on the selling price of the flat AFTER HDB’s valuation of the flat.

Since the valuation is pretty much fixed by HDB.

The seller and the buyer would then decide how much cash-over-valuation (COV) will be paid on top of this valuation.

Usually, this is based on past COV prices which were posted online by HDB.

Which technically could be anything between $1 to infinity and beyond.

Mr Krabs Bathing Money
Source: SpongeBob SquarePants | Giphy

Buyers who had cash flowing out the wazoo would have no problems paying whatever the seller is asking for especially if they die die also want that flat.

See how this quickly became a problem?

After HDB decided to stop publishing the COV prices, sellers could not use the COV as a way to jack up the selling price.

So now… the only way for buyers and sellers to agree on a price is by basing it on the prices of past resale transactions.

Once the selling price is agreed, the buyer will then request for HDB to carry out a valuation to figure out how much COV has to be paid.

Meaning, if the agreed selling price of a flat is $650,000.

And the HDB appointed valuer values the flat at $600,000 after physically inspecting the flat…

That means that the buyer would have to pay a COV of $50,000.

HDB Resale Median Price: Prices of Past Resale Transactions

The only way you can figure out how much to sell or buy a flat would be to use the prices of past resale transactions.

Here are the median resale prices by town and flat type for HDB Resale Flats transaction in 2Q 2020.

HDB Town1-Room2-Room3-Room4-Room5-RoomExecutive
Ang Mo Kio-Less than 20 transactions so not representative$272,000$405,000$555,000-
Bedok-Less than 20 transactions so not representative$275,500$395,000$560,000Less than 20 transactions so not representative
Bishan--Less than 20 transactions so not representative$555,000Less than 20 transactions so not representativeLess than 20 transactions so not representative
Bukit Batok--$260,000$343,000Less than 20 transactions so not representativeLess than 20 transactions so not representative
Bukit Merah-Less than 20 transactions so not representative$327,500$668,000$725,000-
Bukit Panjang-Less than 20 transactions so not representative$308,000$419,000$460,000Less than 20 transactions so not representative
Bukit Timah--Less than 20 transactions so not representativeLess than 20 transactions so not representativeLess than 20 transactions so not representativeLess than 20 transactions so not representative
Central-Less than 20 transactions so not representativeLess than 20 transactions so not representativeLess than 20 transactions so not representativeLess than 20 transactions so not representative-
Choa Chu Kang--Less than 20 transactions so not representative$360,000$430,000$512,500
Clementi-Less than 20 transactions so not representative$290,000$449,000Less than 20 transactions so not representativeLess than 20 transactions so not representative
Geylang-Less than 20 transactions so not representative$243,000$427,500Less than 20 transactions so not representativeLess than 20 transactions so not representative
Hougang-Less than 20 transactions so not representative$280,000$396,500$530,000Less than 20 transactions so not representative
Jurong East-Less than 20 transactions so not representative$262,500$368,000$540,000Less than 20 transactions so not representative
Jurong West-Less than 20 transactions so not representative$260,000$347,900$430,000$530,000
Kallang/Whampoa--$280,000$525,000Less than 20 transactions so not representativeLess than 20 transactions so not representative
Marine Parade--Less than 20 transactions so not representativeLess than 20 transactions so not representativeLess than 20 transactions so not representative-
Pasir Ris-Less than 20 transactions so not representativeLess than 20 transactions so not representative$420,000$500,000$586,900
Punggol-Less than 20 transactions so not representative$356,900$465,000$495,000Less than 20 transactions so not representative
Queenstown-Less than 20 transactions so not representative$298,000$768,000Less than 20 transactions so not representativeLess than 20 transactions so not representative
Sembawang-Less than 20 transactions so not representativeLess than 20 transactions so not representative$354,000$406,000Less than 20 transactions so not representative
Sengkang-Less than 20 transactions so not representative$338,500$421,000$518,000$565,000
Serangoon--Less than 20 transactions so not representative$458,000Less than 20 transactions so not representativeLess than 20 transactions so not representative
Tampines-Less than 20 transactions so not representative$325,000$425,000$530,000Less than 20 transactions so not representative
Toa Payoh-Less than 20 transactions so not representative$250,000$571,500$682,000-
Woodlands-Less than 20 transactions so not representative$245,000$335,000$405,000$580,000
Yishun-Less than 20 transactions so not representative$265,000$379,000$485,000Less than 20 transactions so not representative

Note: figures are rounded to the nearest hundred dollars

Why Use Median Prices Instead of Average Prices?

The median prices listed is the fiftieth percentile amount of HDB resale flat purchases.

If you’re going, “Simi (Hokkien: What)?!”

This means that half of the flats were purchased at amounts above the median price.

And the other half of the flats were purchased at amounts below the median price.

Taking the median price gives us a better representation of what the resale prices are actually like according to the town and flat type.

But if you already have a specific address in mind and want to know what the resale prices are like — down to the individual block…

Or if you just want to find out how much the neighbours in your block sold their HDB flats for…

You can always use the HDB Map Services if you prefer a more interactive experience.

HDB Map Services
Source: HDB

Or you can use HDB’s Resale Flat Prices portal to check the transacted prices for resale flats within the past 2 years.

Here’s what I found for a 4-Room HDB flat in Tampines:

HDB Resale Flat Price October 2019 to October 2020
Source: HDB

If you’re wondering why there’s such a huge price difference ($168,000) between both resale units at Simei Street 1.

It comes down to a couple of things.

What Affects the Valuation of an HDB Flat?

1) Condition of Flat

A well-maintained HDB flat with tasteful renovations and furnishing will always sell for a higher price.

Pay attention to what the exterior of the HDB flat and entire block looks like too as that will also affect prices.

2) Lease of Flat

Unless you’re buying a brand new BTO, any HDB flat that you get off the market will come with a lease that is less than the standard 99-years.

For obvious reasons, the longer the remaining lease left on the HDB flat, the more valuable it will be.

FYI: the remaining lease will determine how much HDB grants or how much of your CPF you can use to fund the purchase

Just look at resale units at Simei Street 1.

The one with 75 years left on the remaining lease is worth way more than the one with 66 years and 11 months left.

3) Location of Flat

Units on a higher floor generally command a premium.

Note: it’s the same with BTOs, every floor you go up, it’ll cost you a few thousand dollars

Also, if the flat is close to key amenities like:

  • shopping malls
  • markets
  • schools
  • MRT stations, bus stops, and interchanges

Or maybe it’s close to town or is a mere 2 MRT stops away from the Central Business District.

You can also expect people to pay more for such flats because of their prime location.

4) Size of Flat

The larger the flat, the higher the value.

Even though both Simei Street 1 options as listed above are 4-Room HDB Flats.

You’ll notice that one is a 4-Room Simplified (84 sqm).

4-Room HDB Flat Simplified
Source: HDB

While the more expensive one is a 4-Room Model A (101 sqm).

4-Room HDB Flat Model A
Source: HDB

You pay more for more space.

5) Scarcity of Flat

For older types of flats like the executive maisonettes (yep, the ones with 2 storeys)… which are no longer being built.

Executive Maisonette Interior
Source: Renonation

These ultra-rare flats will definitely sell for much more.

It’s not just the type of flat too.

Flats in mature estates like Tiong Bahru, where the demand for housing is high.

And the estate is so built-up that it’s unlikely that new BTO projects will be launched… will also naturally sell for higher prices.

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About Kenneth Fong
Owner of a 4-room HDB BTO and married to a financial clutz. Probably the closest to an adult you can find on the Seedly team.
You can contribute your thoughts like Kenneth Fong here.

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