Owners’ sales gaining in popularity

/ EdgeProp
July 9, 2018 8:00 AM SGT
With the residential market picking up, the number of listings by owners at auctions has also risen significantly in 2Q2018. The resale market is healthier, too, with cash-rich en bloc beneficiaries buying replacement homes, notes Joy Tan, head of auction & sales at Edmund Tie & Co (ET&Co).
More properties listed for auctions have also been sold via private treaty, especially for higher-quantum properties whose buyers want to remain anonymous, notes Tan. Banks are also more flexible in considering a sale before auction “if the price is at or above their expectations”, she adds. Private owners are also open to selling by private treaty prior to the auction if there is an attractive offer.
In 2Q2018, several high-end properties were sold at ET&Co’s auctions. They included a semi-detached house on Pasir Ris Way, a mortgagee sale; it attracted 15 bids and went under the hammer for $5 million in May. At auctions in 2Q2018, owners’, estate and trustees’ sales saw a combined total of $11.19 million in transaction value, while mortgagee sales totalled $8.45 million. In 2017, there was a total of 33 forced sales (mortgagee, receivers’ and sheriffs’ sales), compared with 12 owners’, estate or trustees’ sales.
“In past years, mortgagee sales dominated the auction floor,” says Tan. “Owners’ listings have caught up and exceeded the number of mortgagee sales [last] quarter. This is a reflection of how the market has accepted auctions as an alternative way to sell their properties.”
The total value of properties sold under the hammer in 2Q2018 was $19.64 million, compared with $10.48 million the previous year. In 1H2018, the total number of properties sold at auction was 21, with a sales value of $39.6 million. In 1H2017, the number of properties sold at auction was 18, with total sales of $44.71 million, according to JLL. In this period, the highest value of a property sold at auction was $11.38 million for a detached house on Chestnut Drive sold by Colliers International. In comparison, the highest value sold at an auction so far this year by ET&Co was the semi-detached house at Pasir Ris Way.
The highest value property sold at an auction so far this year by ET&Co was the semi-detached house at 25 Pasir Ris Way. It attracted 15 bids and was sold under the hammer for $5 mil (Picture: ET&Co)
For JLL, the highest value of a property sold at an auction in 1H2018 was achieved by a 1,722 sq ft, four-bedroom unit at Spring Grove on Grange Road in District 10. It fetched $2.5 million ($1,452 psf) in a mortgagee sale, according to a caveat lodged in February.
The number of owners’ listings at auctions rose 37% in 1H2018 from a year ago, says Mok Sze Sze, JLL head of auction. “The property auction market is bucking the trend of mortgagee sales, outstripping owners’ sales,” she adds. She foresees that, in 2018, up to 70% of auction listings will be owners’ sale, whereas the number of mortgagee sales will fall 10% to 20% compared with 2017.
The highest-value property sold at an auction by JLL so far this year was a 1,722 sq ft unit on the third floor of Spring Grove that went for $2.5 million (Picture: Samuel Isaac Chua/The Edge Singapore)
The property auction market has become more competitive, with newcomers ERA and PropNex entering the fray last year and in March this year respectively. ET&Co recently branched into art auctions. It was recently appointed to auction 36 paintings by renowned oil and acrylic artist Allen Tang on July 29. Prices of these art pieces range from $6,000 to $60,000. “This art auction is part of ET&Co’s endeavour to be client-centric, as many property buyers also purchase art pieces as an investment or to enjoy in their homes or both,” adds Tan.