Property auction listings see 26.5% fall in 3Q2021

By Charlene Chin
/ EdgeProp Singapore |
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SINGAPORE (EDGEPROP) - Singapore’s auction market has been impeded by Covid-19-led restrictions, with a fall in the number of auction listings and sales transactions in 3Q2021, highlights Knight Frank in a report.
Over the third quarter, there were a total of 150 auction listings — which included repeat listings — a fall of 26.5% from the 204 listings in the preceding quarter. While the month of July recorded 65 listings, listing volumes dropped to 43 in August and 42 in September. Knight Frank attributes this to the “repeated impositions of restrictions to curb the spike in Covid-19 community cases [which] disrupted the auction process and interrupted momentum”.
This compares to the first two quarters of the year, where listing volumes hovered around 200 respectively.

Higher proportion of owner auctions; successful auctions fall in 3Q

Of the 150 auction listings in 3Q2021, owner sales listings accounted for 66.7%, or 100 of the total, more than double the proportion of mortgagee listings at 28%. “Certain banks were willing to grant owners some time to dispose of their property before initiating foreclosure proceedings, given the buoyant real estate market,” notes Knight Frank.
“More owners engaged auctioneers to leverage their network, using their expertise to connect with a larger pool of potential buyers,” it adds, noting that “contrary to what might be public perception, not every sale by auction is a distressed one”.
For instance, a ground-floor corner shop space at 71 Seng Poh Road was sold under the hammer at $3.2 million, enjoying a 28% premium over the opening price of $2.5 million via an estate sale.
Some owners in the booming shophouse market also turned to auctions to achieve a good price point, it observes. Under the segment, two fully tenanted shophouses at 77/79 Dunlop Street in the Little India Conservation Area were sold to investors for $7.6 million.
The success rate of auctions in 3Q2021 — which include repeat listings and exclude properties sold outside of auction — fell to 4.7%, down 6.4% q-o-q. “As auctioneers were cautious and adhered strictly to the safe distancing limits of those attending physical auctions, seven properties were sold for $20.3 million in 3Q2021, from 13 properties in 2Q2021,” it says.

Auctions by property type

Over the quarter, residential properties made up 50%, or 21, of the total mortgagee sale listings, where almost all were non-landed properties. “There were hardly any bank sales for landed homes as more owners marketed their own properties before resorting to foreclosure,” it adds.
In 3Q2021, there were a total of 13 industrial mortgagee listings, down 18 from the previous quarter. Of the 13 properties, 12 opened at prices below $2 million, with only a five-storey detached factory at 8 Tuas South Street 6 going for $3.5 million. This property was sold during auction at the opening price.
In the retail sector, mortgagee listings dropped to seven from the 27 listings last quarter. Opening prices averaged $1 million in 3Q2021, down from $2.8 million in 2Q2021.
“The majority were ancillary retail shops in condominiums like Spazio @ Kovan, Kensington Square and Millage, with only one in the business centre Hexacube. Opening prices ranged from $670,000 for a 261 sq ft unit at Millage, to $1.4 million for a 990 sq ft unit at Euhabitat,” notes the real estate consultancy.
Looking ahead, “the number of auction listings in the next two months is expected to be tepid. However, once the healthcare ecosystem has adjusted to the new normal and barring any other unforeseen developments in the Covid-19 situation, the level of auction activity is expected to pick up towards the end of the year or in early 2022”, says Knight Frank.

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