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This is the definition given by from Evelyn Chang Executive Director Singapore Institute of Surveyors and Valuers:

Valuation reflects the state of the market and the demand and supply situation. The final selling price of a property is dependent on the demand and supply of a property and the negotiation between the buyer and seller.

Essentially this is what valuation is... the rest below is just some spinning to give it justification.

The improved sentiment in the economy as seen in the recent months is reflected in the valuation of HDB properties. The market value of a property is determined on the basis of a willing buyer and a willing seller, with both parties acting with knowledge, prudence and without compulsion in an arm's-length transaction.

For homogeneous properties such as HDB flats, the common valuation method adopted is the direct comparison approach. This approach is similar to that used by a potential buyer when considering the purchase of a flat. He would look at the location, consider the age, size, design, height and other important characteristics of the flat and compare the prices paid for comparable flats in the locality.

The final selling price of a property is dependent on the demand and supply of a property and the negotiation between the buyer and seller. Some buyers may pay a premium for a flat for personal reasons. It is the willing buyer and seller that determines the final price and this final price as considered by the market forces can be above or below the valuation.

(24-01-2011, 10:11 AM)flinger Wrote: [ -> ]For homogeneous properties such as HDB flats, the common valuation method adopted is the direct comparison approach. This approach is similar to that used by a potential buyer when considering the purchase of a flat. He would look at the location, consider the age, size, design, height and other important characteristics of the flat and compare the prices paid for comparable flats in the locality.

And that is the reason that is contributing directly to the soaring HDB prices... Each demands a COV on top of the selling price, once transacted, other sellers nearby will be compelled to do the same, albeit now based on an increased sale price, ensuring that a vicious cycle ensues.

But I'm sure there are enough grouses on HDB prices already so I will not add to what we already have.

(24-01-2011, 11:50 AM)Blackjack Wrote: [ -> ]

(24-01-2011, 10:11 AM)flinger Wrote: [ -> ]For homogeneous properties such as HDB flats, the common valuation method adopted is the direct comparison approach. This approach is similar to that used by a potential buyer when considering the purchase of a flat. He would look at the location, consider the age, size, design, height and other important characteristics of the flat and compare the prices paid for comparable flats in the locality.

And that is the reason that is contributing directly to the soaring HDB prices... Each demands a COV on top of the selling price, once transacted, other sellers nearby will be compelled to do the same, albeit now based on an increased sale price, ensuring that a vicious cycle ensues.

But I'm sure there are enough grouses on HDB prices already so I will not add to what we already have.

There are also periods in HDB history that flats were selling below valuation and caused the valuation to drop further.
Unless the resale market is abolished and flats(new and old) are allocated by ballots, the only way to separate two buyers is the depth of their pockets.

Yes there are. Unfortunately (or fortunately) these are times when demand presides over supply and thus the reason for the high COV these years.

Have to agree with you on your second part.