Auction market anticipated to pick up in 2H2023: Knight Frank

By Atiqah Mokhtar

/ EdgeProp Singapore |

July 25, 2023 6:00 PM SGT

In 2Q2023, auction listings rose 9.3% q-o-q to 82, but fell 30.5% y-o-y (Picture: Samuel Isaac Chua/The Edge Singapore)

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SINGAPORE (EDGEPROP) - The auction market stayed muted in 2Q2023, with a research report by Knight Frank stating 82 listings were recorded last quarter, including repeat listings and excluding properties sold outside of auction. While this is a 9.3% q-o-q increase compared to the 75 auction listings in 1Q2023, the figure represents a 30.5% y-o-y drop from the 118 recorded in the same quarter last year.

However, the total gross sales value generated by the auction market totalled $4.8 million in 2Q2023, 16% higher than the $4.1 million registered in the previous quarter.

Mortgagee sales made up 22 listings last quarter, an 8.3% drop from 24 in 1Q2023 and a 56% fall from 50 in 2Q2022. On the other hand, owner listings totalled 57 last quarter, 26.7% higher than the 45 owner listings in 1Q2023, but 8.1% lower than 62 in 2Q2022.

There were 37 residential auction listings last quarter, making up 45% of all listings. They comprised 12 mortgagee listings, 24 owner listings, as well as a one estate sale listing. Out of the 37 listings, four properties were sold, translating to a success rate of 4.9% for 2Q2023. This is lower than in the previous quarter, when the six properties sold accounted for an 8% success rate.

Knight Frank highlights that the sole estate sale listing was for a freehold semi-detached house on Happy Avenue Central, off MacPherson Road, that went up for auction on six different occasions. The most recent attempt was in April, where it had an opening price of $7.5 million – $2.38 million lower than the $9.88 million opening price when it was first listed for auction in August 2022.

For non-residential properties, there were four retail and six industrial mortgagee listings in 2Q2023, out of which four industrial properties were sold. These included the sale of Tong Lee Building, a freehold industrial property on Kallang Pudding Road, off MacPherson Road and Aljunied Road, for $1.89 million – some 8.7% higher than its opening bid of $1.74 million.

For owner listings, 21 were for retail properties, five were for offices, and seven were for industrial assets.

Looking ahead, Knight Frank anticipates the auction market to pick up in the second half of the year amid the challenging economic environment. Citing data from the Ministry of Law, the firm highlights that bankruptcy applications between January and May rose 13.9% compared to the same period last year. “While the impact in the real estate sector typically lags economic indicators, the increasing number of bankruptcy applications filed could translate into more mortgagee listings in the second half of the year,” the report states.

At the same time, owner listings are expected to continue outnumbering mortgagee listings as property owners may opt to liquidate their assets in order to mitigate financial challenges. In any case, Knight Frank believes the uncertain economic outlook could prompt owners towards more realistic pricing. The firm is maintaining its projection for auction success rates in 2023 to come in between 5% and 7%.

Check out the latest listings near MacPherson Road, Tong Lee Building

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