Singapore developers held a meeting with valuers the previous week amid the recent complaints regarding the conservative valuations, which have derailed home sale transactions as prospective home buyers failed to secure from banks the required loan quantum.
BT understands that developers are not in agreement with the valuers about the conservative valuations and believes that it is the banks that are not lending.
“Generally, if there are transactions, we’ll match (with valuations). It’s the banks that are more cautious about lending to certain profiles of borrowers like investors, especially if they are foreigners,” one valuer told BT.
Issues have also been raised by valuers like the dearth of comparable transactions. They have also explained the ways that they employ in such situations to arrive at valuations.
“We explained that some banks require valuers to look at three comparable transactions, and how we generally do not take into account outlier transactions that may perhaps reflect ‘depressed’ prices,” said another valuer.
According to some sources, it was an amicable meeting, drawing heads of property consulting groups, over 20 valuers and Real Estate Developers Association of Singapore’s executive committee members under the management of President Simon Cheong.
“We wanted to better understand issues that valuers may have in their day-to-day valuation and what else the profession may need from developers to enable them to give (as) updated and relevant (a) valuation as possible,” said Redas spokesman when contacted.
“The discussions were general in nature and discrepancies in valuations in some instances were highlighted and analysed. Valuers shared with us some of the constraints they are facing such as the lack of or insufficient comparable sales data and other issues.”
“The session was fruitful as it helped us understand one another better and we agreed to look into areas where communication and interaction could be improved upon.”
It is not usual to find similar banks that are willing to offer 75 percent or 80 percent loan on a high-end residential unit priced at $2,000 per square foot, a property consultant told BT.
“It’s particularly difficult for foreign buyers, even PRs in some instances, to get loans for investment properties. Banks are more willing to lend to Singaporeans buying residential properties for owner occupation.”
“Some of the bigger banks should take the lead and be more proactive in lending to property buyers, not just for entry-level but also luxury homes, given that spot prices have already come off about 40 per cent.”
Another valuer said in agreement, “We provide the valuations. It’s up to the banks whether they want to lend, and how much. It’s a commercial decision for them.”