http://www.businesstimes.com.sg/arch...arket-20140103

Published January 03, 2014

Positive signs in property auction market

Total sales last year up 69.5% at $99.6m even as successful auctions slip to 21 from 26

By Mindy Tan [email protected]


WHILE both buyers and sellers wait for market clarity, there are some signs that the property auction market has rebounded. According to data from Jones Lang LaSalle, the total sales value for last year jumped 69.5 per cent to hit $99.6 million, compared with $58.7 million a year ago. This is despite the total number of successful auctions slipping from 26 in 2012 to 21 last year.

In the fourth quarter, the Singapore auction market registered a total of $3.9 million in sales closed, a 15.1 per cent dip from the preceding quarter's $4.6 million. Compared to the five-year quarterly average of $32.7 million and 10-year quarterly average of $46 million, Q4's sales value fell by 88.1 per cent and 91.5 per cent, respectively.

Taking the annual figure as a gauge, the total sales quantum of $99.6 million last year was 23.9 per cent below the five-year average of $130.8 million, and 45.9 per cent less than the 10-year average auction sales value of $183.9 million.

The quiet auction market in the second half of last year can be attributed to the credit tightening measures of the total debt servicing ratio and the additional buyers' stamp duty which deterred investors, said Mok Sze Sze, head of auction and sales at Jones Lang LaSalle.

"Buyers have been very cautious at this point in time, when the property market is believed to have reached an inflection point. On the other hand, most of the sellers do not seem willing to lower their price expectations. Both sides are still waiting for market clarity," she said.

The largest auction deal last year was that of a factory at 39 Benoi Road, worth $25.6 million. In comparison, the largest deal in 2012 was worth $12.7 million, when a petrol station at 311 Jalan Ahmad Ibrahim changed hands. All four successful auctions in Q4 were from the industrial sector.

In terms of listed auction properties by asset class, residential properties continued to surpass the number of industrial and commercial properties put up for auction. In Q4, a total of 64 residential properties were put up for auction versus 20 commercial and industrial properties each.

Mild and gradual recovery is expected in the coming quarter, said Ms Mok.

"Increase in sales volume compared to 2013 is predicted as buyers and sellers seek ways to absorb the additional costs incurred due to the cooling measures. In the near term, the auction market is likely to gain back the sales momentum and recover at a faster pace as investment sentiment improves," she said.