Sale value at property auctions up 33%
By Jo-ann Huang | Posted: 16 December 2010 2258 hrs

SINGAPORE : With more prime real estate changing hands, the sale value at property auctions in Singapore has shot up 33 per cent from the previous year to a total of S$223.9 million in 2010, according to international property consultant Colliers International.

This rise above 2009's sale value of S$168.39 million is still 45 per cent lower than the decade-high of S$407.43 million recorded in 2007.

The increase in sale value this year was despite a 39.8 per cent dip in auction sale volumes.

Colliers International attributes this to an increase in the sale of high-value properties, particularly those valued above S$5 million.

In the aggregate, about 71 properties were sold in 2010, compared to 118 sold last year. However, as many as 11 high-value properties, each worth more than S$5 million, were sold at auctions this year, compared to only two in 2009.

Colliers said high-value properties performed well amid a slowdown in the mass-market segment, which experienced dampened demand due to moderating prices and government cooling measures.

"The robust sale of high-value properties was fuelled by the pick-up in demand for landed homes, especially the Good Class Bungalows, as well as the returning confidence of investors, which is evidenced by the number of en bloc investment-grade properties bought by institutional investors during the year," said Grace Ng, deputy managing director of Colliers International.

Residential properties contributed 51.3 per cent to the total auction sale value, 30 per cent higher from a year earlier.

Residential sales were driven mainly by the landed property segment. A total of 12 landed homes, worth S$78.95 million altogether, accounted for 68.8 per cent of the year's residential sales for auctions.

The non-landed segment saw 24 properties, worth S$35.88 million, being sold at auctions. Nine of the properties are located in prime districts and are altogether worth
S$21.71 million.

With yields of 4 per cent to 6 per cent, the retail sector saw a total of S$27.1 million in auction sales, making it the second-biggest contributor to the total.

Shophouses were much in demand. Four properties, in areas including Beach Road and Dunlop Street, were sold for S$12.6 million, accounting for 46.6 per cent of the value of all retail properties auctioned off in 2010.

Amidst rapidly recovering take-up rates and rents, office properties chalked up S$18.19 million worth of transactions, a five-fold increase from S$3 million last year.

"Sales were boosted by the mortgagee sale of seven strata office units in The Central for a collective amount of S$14.59 million. Other office properties sold were strata units in International Plaza, United House, Manhattan House and Shenton House," said Colliers.

As many as 688 properties were put up for auction sale by owners this year. Forty-two of the properties were sold, raking in a sale value of S$178.59 million.

On the other hand, only 103 properties were put up as mortgagee sales, the lowest since 1998. Twenty-nine of the mortgagee properties were sold, fetching a total sale value of S$45.31 million.

"The growing dominance of owners' sale in auction bears testimony to the changing public perception of auction - from one that was largely associated with the sale of distressed properties and hence shunned by property owners, to one that is increasingly favoured even by the owners of high-value properties," Ms Ng said.

She added: "Increasingly, we see permanent residents and foreign bidders from neighbouring countries - including Malaysia, Indonesia, Hong Kong, India and even China - attending auctions to bid for their 'choice' properties."

- CNA/ms