New HDB rules do not change resale market

The National Development Ministry has announced new procedures for the Housing and Development Board resale market (“HDB resale: Parties must agree on price before valuation”; March 11).

The reasons given were: To focus negotiation on price instead of cash-over-valuation (COV) and to put the process in line with that of the private property market. The state of the market was also taken into consideration.

But this does not change the resale market or even prevent the existence of COV. It merely shifts the valuation report to a later stage and, perhaps, avoids the situation of sellers requesting for a new valuation.

Buyers and sellers can still call any HDB-appointed valuer and request for an indicative valuation. However, the valuer may not be the one who does the report. Seasoned property salespeople can also advise buyers and sellers on the value. It really depends on whether buyers and sellers want to use the published HDB prices, an indicative valuation or a salesperson’s advice.

This practice of requesting for a valuation report after an option has been granted in the private property market has mostly seen valuers matching the agreed price. If the same were to happen in the HDB resale market, it would serve only to stop the slide in prices and mask the visibility of COVs.