Sellers Are Not Serious

Got this published in the TODAY paper on Jan 5:.

"The latest cooling measures by the HDB have admittedly had some effect in curbing the COV requirements for resale flats, but still we're unlikely to see any decrease in valuations. In fact, I have come across some sellers who have had their flats re-valuated even before their current valuations have expired to lock-in a further gain. A flat owner who rejected by my offer did exactly that because he was convinced by property agents that his flat was "too cheap". In another case, a property agent was trying to convince me to buy a particular flat because the valuation price had increased by $10,000 since the last assessment two months earlier. Is this practice of multiple valuations for a HDB flat across such short period condoned? Can the value of a flat can really increase so quickly? Since valuation prices are partly based on previous assessments, frivolous seller behaviour causes unjustified increases in baseline prices. In addition to focusing on buyers, I feel that the HDB also should introduce steps to weed out non-serious sellers. Perhaps a sellers' cash deposit to the value of 1% of the valuation price is necessary."

I am sure there are strong opinions about this, and some have appeared on Mr Wang Says So blog.

Simply put, it's greed. Sellers want the best highest price and buyers want a cheap deal. So compromise is left to negotiations and market forces apparently. But like all things in the market, there are ways to manipulate the situation, and valuations is one way. It bothers me that people don't play fair. Yeah, that's naive, whimsical thinking. But being in the thick of it, it's not funny anymore. We're a tiny country and 80% of us live in tinier cubes in the sky. Any changes that happen to home prices here have massive consequences because we're so small. Resale flat prices have gone up by 50% since 2007. Many first time buyers have been priced out of the market and those who jump in headlong and commit to high prices face a lifetime of debt. We're essentially locked into our economy till we decide to call it quits or win lottery. Quality of life issues come to play. We'll have fewer kids because it'll be too expensive. So will Singapore always have a flux of immigrants? Maybe, because one generation after the next will find out how pricey things can get.

It's just bloody sad that the powers that be have failed to protect our interests and in some ways watch it all happen without seemingly little reaction till it was late. I think the HDB shouldn't even put resale flats on the open market at all - have ballotting at valuation prices just like they sell new flats. Especially since they technically own every flat and we're just leasing. Maybe devolving their responsibility to the nation to property agents is their way of leaving things to market forces.

I don't think flat prices are coming down. They'll plateau or grow at lower speed. So those who made a buck, good for you. Those who didn't, well, keep those fingers and toes crossed.