HDB Valuation Guide (2024): Top 3 Things Resale Flat Buyers in Singapore Must Know

Eugenia Liew
HDB Valuation Guide (2024): Top 3 Things Resale Flat Buyers in Singapore Must Know
If you’re looking for an HDB valuation, chances are you’re thinking of buying an HDB resale flat. How much can you expect to pay for one in 2024?
Due to the increased demand for an HDB resale flat, prices for HDB resale flats have continued to climb. According to HDB Q4 2023 flash estimates, HDB resale prices have climbed for the fifteenth consecutive quarter in a row. And based on HDB resale statistics, 2023 has beat 2022 for the most number of million-dollar flats transacted in a year ever!
If you’re a buyer looking to buy a resale HDB flat, obtaining the HDB valuation is important as it will determine both the HDB loan and CPF amount that you can use to finance your home. While you must first agree on the price with the seller and sign the Option to Purchase (OTP) before getting the valuation from HDB, you can still do your research so that you won’t have to pay too much cash over valuation (COV) or cash in excess.
In this article, you’ll learn how HDB’s valuation will affect you, and some other key things you should note about it.

Cash Over Valuation (COV) for HDB Flats (Video)

HDB Valuation for Resale Flats: An Overview

What is it?HDB’s estimation of how much the resale flat is worth
What does it affect?The amount of CPF savings you can use, the loan amount you may take, and COV to pay
How to get a valuation report?After signing the OTP, the buyer can submit a Request for Value

HDB Resale Valuation: How Does It Work?

The HDB valuation is simply an estimation of how much the resale flat is worth and is part of the process of buying your HDB resale flat.
If you’re buying a resale HDB flat with your CPF savings, or with a housing loan from HDB or a bank, you’ll need to submit a Request for Value from HDB.
As a resale buyer, you’ll first need to negotiate with the seller on the selling price and pay him/her the option fee before requesting an HDB valuation.

HDB Valuation Request or ‘Request for Value’

Once the seller has granted you the OTP, you can then submit the HDB valuation request.
You, the buyer, can submit the ‘Request for Value’ via the HDB Flat Portal, or ask your property agent to do it on your behalf on the e-Resale e-Service or Estate Agent Toolkit. Once done, you will be able to see the progress and status of your request for value on the HDB Flat Portal.
If HDB decides that a valuation is indeed required to determine the value of the flat, an assigned valuer will come to the flat to inspect it. Do note that you must complete the ‘Request for Value’ (you must obtain the outcome) before you submit the resale flat application.

How Does the HDB Valuation Affect HDB Resale Buyers?

The HDB property valuation will determine the amount of CPF savings, housing loan, and COV (or not) to pay for your resale flat.
Let’s say that you and the seller have agreed on the selling price of $725,000. You pay the OTP and submit the HDB valuation request. HDB’s official valuation of the HDB flat, however, is $700,000. This would mean that you will be paying a COV of $25,000.
The amount of CPF savings and housing loan that you can use is based on the lower of the HDB property valuation or price, in this example, it’s $700,000.
However, the COV will affect the stamp duty that you pay, namely, Buyer’s Stamp Duty (BSD) and Seller’s Stamp Duty (SSD) as they are based on whichever is higher: the valuation or price. In short, COV would result in higher BSD and SSD.

1. Amount of CPF Savings You Can Use

The remaining lease of the property is at least 20 years and can cover the youngest buyer until at least age 95CPF usage
YesBuyer can use CPF to pay for the property up to the HDB valuation Limit
NoUse of CPF will be prorated based on the extent of the remaining lease of the property and can cover the youngest buyer to the age of 95. This will help buyers set aside CPF savings for their housing needs during retirement (e.g. a replacement property).
The amount of CPF savings that you can use to pay for your HDB resale flat is based on the remaining lease of the property.
Using the example above, you’ll be able to use your CPF savings up to the valuation of $700,000 if the remaining lease of the flat is at least 20 years.
You may use the CPF online calculator to calculate the amount of CPF savings that you can use.

2. Loan Amount You Can Get

HDB loan
Up to $560,000
Bank loan
Up to $525,000
If you’re taking a loan from HDB or the bank, the loan amount is based on the valuation amount and not the selling price. Specifically, the LTV ratio of the resale flat will determine the maximum amount that you can borrow from HDB or the bank.
After the September 2022 property cooling measures, the LTV for HDB loans has been reduced to 80%. Based on the valuation of $700,000, you can take up a loan of up to $560,000. If the remaining lease of the flat does not cover the youngest buyer from the age of 95 and beyond at the time of flat application, the loan limit is prorated.
On the other hand, for a bank loan, the LTV is 75%. This means that you can use a bank loan of up to $525,000 to pay for the HDB flat.

3. COV You Might Have to Pay

COV is essentially the difference between the selling price and the actual valuation of the flat.
Since the housing loan (whether it’s from HDB or a bank) will only cover up to the HDB property valuation amount, you’ll have to pay the balance in cash.
As explained in the example above, this means that you’ll have to pay the COV of $25,000 in cash.
HDB property valuation played a huge role in the sky-high COV prices before the government introduced a cooling measure in 2014 to bring down property prices.
However, increased demand for resale flats has seen COV again in the spotlight amid a resilient property market, which has seen more buyers paying COV for their choice of HDB flats.

4. Seller’s Stamp Duty (SSD) the Seller Might Have to Pay

In most cases, HDB flat owners can only sell their homes after fulfilling their Minimum Occupation Period (MOP). That means HDB sellers do not typically incur any Seller’s Stamp Duty (SSD) when selling their property.
However, if an HDB owner is successful in appealing for their MOP to be ‘waived’ within three years of acquiring it (i.e. within the holding period), they may have to incur SSD when selling their property. Since SSD is based on either the selling price or market value of the property, the higher the COV, the higher the SSD.
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What Are Some Factors That Affect the HDB Valuation and COV?

How much COV you pay depends on your agreed buying price and the valuation of the resale flat. Some factors may make an HDB flat more appealing to buyers but yet are not taken too much into account by HDB in its valuation.

1. Location of the HDB Flat

Flats located close to amenities such as MRT stations, shopping malls, and schools tend to sell at a higher price. They’re also more likely to fetch a higher price if they’re located in mature estates, where more amenities are available for residents.
For convenience and accessibility, people are more willing to fork out a premium to buy these flats.
For example, a resale flat in Bishan is more likely to sell above the flat’s valuation because of the flat’s location and surrounding amenities, compared to an HDB flat located in Woodlands.
The same goes for buying a resale flat in Tanjong Pagar. Given its proximity to the CBD, it’s more likely that people will pay a higher COV for it.

2. Condition of the HDB Flat

Flats with extensive renovations and furnishings tend to fetch a higher price. People are also more likely to pay more for older resale flats, provided that they’re well-maintained.
On the other hand, if the resale flat that you’re thinking of buying looks run down, it’s more likely that the COV will be lower.

3. Size and HDB Flat Type

Larger flats in general command a higher selling price.
If you’re eyeing a rare resale flat, such as an HDB maisonette or jumbo flat, be prepared to fork out a higher COV. As these flat types are no longer in production, they’re highly in demand because of their rarity.
Experienced property agents, especially those specialising in the particular estate, may also be able to advise you on what kind of COV to expect.

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HDB Valuation Report: Things to Note to Receive One

Before you decide on buying the resale flat and submitting a request for valuation, be sure to take note of the following administrative matters before you receive your valuation report:
  • You’ll need to pay a valuation fee (aka admin fee) of $120 for the HDB Request for Value (the HDB valuation request).
  • You’ll need to submit the Request for Value by the next working day after the Option Date stated in the Option to Purchase.
  • Should HDB decide that a valuation is needed, they will assign the valuer for you.
  • If you’re happy with the valuation, you’ll have to submit a separate application to buy the resale flat.
  • Once the value of the HDB flat is published on the HDB Resale Portal and you’re satisfied with it, you’ll need to submit your resale application within three months. Otherwise, you’ll have to submit another request for valuation.

What You Can Do to Get an Idea of the HDB Valuation and Reduce COV Amount

To get a better sense of the HDB resale flat’s valuation, you can start by doing some due diligence. There are various methods for you to do so:
  1. You can get an estimation of the price of resale flats in the estate by referring to the transacted resale flat prices on HDB.
  2. You can also search for similar-sized HDB flats in the same area/estate on PropertyGuru as the one you are keen on getting.
Each of these methods will give you a rough idea of the possible selling price range of the HDB resale flat. Alternatively, you may use PropertyGuru’s valuation tool.

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With the baseline price in mind, you can then use that as a basis for negotiation with the seller. Make sure to negotiate with the seller so that you reduce as much COV as possible. But do also remember not to be too aggressive with your bargaining because it can indicate that you aren’t a genuine buyer and just turn off the seller.
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Disclaimer: The information is provided for general information only. PropertyGuru Pte Ltd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

More FAQs About HDB Valuation

This is usually done by the buyers or the hired agent. After an OTP has been granted by the seller to the buyer, a Request of Value may be submitted the next working day by logging into HDB e-Service with your NRIC number and SingPass.

The HDB valuation request typically takes about seven working days to process. Once the seven days are up, you will receive the HDB valuation report with your HDB valuation price.

Yes, you can sell your HDB at any price that you want. With that in mind, a Seller's Stamp Duty is still charged based on the HDB valuation price.

Request for Value is a compulsory submission to HDB if you are a buyer who is financing a resale HDB unit with CPF savings or a housing loan (HDB/bank). That's because the Request for Value will give you an HDB valuation price that will be used to calculate your loan quantum.

Unfortunately, the formula for HDB valuation price is not disclosed to the public. However, you can still get the final HDB valuation price through the HDB Request for Value. Alternatively, you can use PropertyGuru's HDB valuation calculator to get an estimate of the HDB valuation.