Auction deals accelerate in July

/ EdgeProp
August 4, 2017 2:00 PM SGT
In July, 11 properties were sold at auctions, with another four sold before the auctions. Total transaction value for the month amounted to just over $44 million, which is almost equivalent to the sales value of the 18 units sold in 1H2017 ($44.74 million), according to Knight Frank Research.
“It’s the highest number of deals done at auctions for as long as I can remember,” says Joy Tan, head of auction at Edmund Tie & Co. At ET&Co’s July auction, four properties were sold for a total of $12.45 million, the highest achieved at an auction last month. This was followed by Colliers International, which sold three properties worth $11.75 million last month.
Prior to ET&Co’s July auction, a 1,238 sq ft, two-bedroom unit on the third level of The Residences at W Singapore Sentosa Cove was sold. It is said to have fetched $2.2 million ($1,777 psf) in a private-treaty deal. The unit was a mortgagee sale.

The two units at The Residences at W Singapore Sentosa Cove that surfaced as mortgagee sales in the last two months have been snapped up by a Singaporean buyer in private-treaty deals

Another two-bedroom unit at Residences at W, also a mortgagee sale, was put up for auction twice by Colliers International in May and June with opening prices of $2.5 million and $2.48 million respectively. However, the 1,227 sq ft unit was withdrawn and subsequently put up for sale by private treaty instead. It was also snapped up for about $2.2 million.
The buyer of both units at Residences at W is believed to be a Singaporean, and ET&Co was the broker for both transactions. The price of $2.2 million for each unit represents a markdown of 37% and 38% from the $3.49 million ($2,822 psf) and $3.55 million ($2,891 psf) paid by the original buyers respectively for the third- and fifth-floor units in 2010.
Another unit that was also sold prior to ET&Co’s auction last month was an 840 sq ft, two-bedroom unit at The Metropolitan. The fifth-floor unit fetched just above $1 million, which is almost double the $556,250 ($663 psf) that the previous owner paid in December 2006, according to a caveat lodged then. The unit at The Metropolitan was also a mortgagee sale.
However, a big-ticket item sold prior to JLL’s July auction was an intermediate detached house at Wak Hassan Drive. The three-storey property comes with a swimming pool and fronts the sea. According to JLL’s head of auction, Mok Sze Sze, bids went up to $5.2 million at the auction in June, and the property was withdrawn as it failed to hit the reserve price. The house is said have been sold for a higher price, although a caveat has yet to be lodged.

An 840 sq ft, two-bedroom unit at The Metropolitan was sold for just over $1 million prior to ET&Co’s auction in July


Pick-up in big-ticket deals

Mortgagee sales remain popular as buyers seek bargains at auctions. While buyers are predominantly Singaporean end-users, there has been an increase in enquiries from non-Singaporeans and permanent residents, notes JLL’s Mok.
For instance, at JLL’s auction on July 28, a 3,068 sq ft penthouse at The Paterson was sold for $5 million ($1,630 psf). The buyer is said to be a non-Singaporean. The four-bedroom penthouse on the 20th floor of The Paterson was an executor’s sale. It had an opening price of $5.5 million and received a counter-offer of $4.7 million before it went under the hammer for $5 million. The unit last changed hands for $5.75 million ($1,875 psf) in December 2010. The Paterson is a freehold development with just 88 units. It was completed in 2004. “The price at $1,630 psf is attractive, given that the unit is renovated, in a prime location and of freehold tenure,” notes Mok.
The biggest-ticket item sold at an auction last month was a three-storey detached house at Lorong G Telok Kurau. The property has a built-up area of 3,477 sq ft and sits on a 7,502 sq ft freehold plot. A mortgagee sale, the property was put up for auction for the first time by Colliers International on July 27. It went under the hammer for $6.5 million. The buyer is said to be a Singaporean who wants to redevelop the property for his own use.
Another unit at Colliers’ auction that found a buyer last month was a five-bedroom unit on the 25th floor of The Trillium. The 2,390 sq ft unit was also a mortgagee sale. It had an opening price of $4.6 million and received a counter-offer of $4.38 million before it was sold for $4.6 million ($1,925 psf). The previous owner paid $5.08 million ($2,127 psf) for the unit a decade ago, according to a caveat lodged then.

A 2,390 sq ft, five-bedroom unit at The Trillium was E sold at Colliers’ auction in July for $4.6 million

However, it is not just mortgagee sales that are drawing buyer interest. At ET&Co’s auction last month, a 2,853 sq ft, four-bedroom penthouse at The Suites @ Central on Devonshire Road in prime District 9 was put up for sale by the owner. It fetched $5.5 million ($1,928 psf), about $700,000 above the $4.8 million ($1,682 psf) that the owner had paid for the unit 11 years ago. The 157-unit freehold Suites @ Central was completed in 2009.
Another owner’s sale at ET&Co’s July auction that went under the hammer was a double- storey corner shophouse on Serangoon Road. The unit fetched $4.5 million. “This shows it’s not just distressed sales that find buyers at auctions today,” says ET&Co’s Tan.

Strong start to second half

At Knight Frank’s auction on July 25, a 1,044 sq ft, two-bedroom unit at Urbana on River Valley Close was sold for $1.7 million ($1,628 psf). It was a mortgagee sale. Ten years ago, the previous owner paid $1.23 million ($1,174 psf) for the unit.
Another mortgagee sale of a condominium unit that found a buyer at Knight Frank’s auction was a two-bedroom unit at Signature at Lewis. The 980 sq ft unit on the fourth floor is located in a 12-storey block that contains just 32 units. The freehold Signature at Lewis in prime District 10 was completed in 2011. The 980 sq ft unit fetched $1.395 million ($1,423 psf) at Knight Frank’s auction. A prior caveat was lodged for the unit at $1.41 million ($1,439 psf) last November, according to URA Realis.
The pick-up in transactions at auctions could be partly due to the spate of successful en bloc sales in recent months, says ET&Co’s Tan. “Confidence has returned to the residential market, and those who have sold their units in a collective sale are now on the hunt for a replacement property.”
With interest rate still low, ample liquidity in the market and prices at attractive levels, JLL’s Mok sees July’s performance as “a strong start to the second half of 2017”.
This article appeared in The Edge Property Pullout, Issue 791 (August 7, 2017) of The Edge Singapore.