Renovation Impact on Valuation (HDB Resale)
Renovation can significantly impact the valuation of an HDB resale flat, potentially leading to a higher Cash Over Valuation (COV) if you're buying a well-maintained unit. Here's a breakdown of the factors influencing the valuation difference:
Extent of Renovation: Major renovations with high-quality finishes and modern features will generally command a higher valuation compared to basic or outdated renovations.
Condition of Renovation: Well-maintained and functional renovations with good workmanship will be valued more favorably than poorly done or outdated renovations.
Market Trends: Popular renovation styles and features in demand within the area can significantly influence the valuation.
Valuer's Judgement: Ultimately, the valuation is determined by a qualified HDB valuer who considers various factors beyond renovation, including location, floor level, and flat type.
Valuation Difference Range:
It's difficult to provide an exact percentage difference as valuations are subjective. However, estimates suggest a well-renovated flat might fetch $20,000 to $50,000 or even more compared to an original condition flat with similar attributes (location, size, floor level).
Using this information to estimate COV:
Example: If you're interested in a well-renovated flat valued at $400,000 and your HDB loan eligibility is $350,000, the COV might be around $50,000 ($400,000 - $350,000).
Important Note:
COV is just one factor to consider. Carefully assess the renovation quality and factor in potential future renovation costs for an original condition flat before making a decision.
Here are some additional resources that you might find helpful:
HDB Resale Flat Valuation: https://www.hdb.gov.sg/residential/selling-a-flat/overview/resale-statistics
By understanding the impact of renovation on valuation, you can make more informed decisions while searching for your HDB resale flat and potentially minimize your COV.
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