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| Valuation of property and determination of premiums |
Generally, real estate are considered heterogeneous products.
Each and every property has its own specific traits which NO
OTHER UNIT possesses. Properties are not like mp3 players or
clothings and apparels where the products within a single batch
all offer the same "service" to the buyers. For instance,
properties will always either be on different floor levels or
different facings.
It is difficult to place an accurate figure on the price one
should pay for a property. In addition, it is tough to place a
monetary value on the premium of certain aesthetics as their
appeal or the opposite is often emotional. For instance, the
value of a desirable 20th floor flat is |
diminished if it looks
directly into the neighbour's living room because of the
building's design. Thankfully, there's always valuers (NOT
valuators) to put a monetary value on the property.
In Singapore, almost all residential properties are valued via a
common technique known as the "sales-comparison". This process
uses the transacted data from the similar and comparable
properties as a gauge to estimate the market value for a
property. This technique works best when there are (1)
sufficient property transactions within the last 6 months and
(2) the properties are regarded as similar or comparable to the
subject property.
As a rule of thumb, valuation |
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and real estate experts suggest
the following premium features within a property.
Tenure - Freehold properties generally calls for around 10 - 20
% more in value but of course, remembering to compare likes with
likes; a brand new 99-year leasehold property could still be
more expensive than 150 year old freehold property.
Facing - Beachfront properties should garner around 5% premium.
But be watchful of the expressways and noise that could be in
close association. Having the morning sun is also more
appreciated than having to return home to a steaming hot home
baked by the setting sun (~$10,000)
Accessibility - Being close to MRT has been |
reported to raise a
property's value by up to $20,000.
Amenities - Premier schools have generally allowed sellers to
price their properties higher due to the higher demand.
Unit number - Auspicious numbers such as 6 and 8 are more sought
after than 4.
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