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Thread: First-half auction sales top $72m

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    Default First-half auction sales top $72m,00.html?

    Published June 27, 2009

    First-half auction sales top $72m

    Small investors have been active at recent sessions, with savvy bidders also making counter offers


    A STRONG showing at auctions this week raised the tally for properties sold under the hammer in the first half-year to $72.4 million - just 13 per cent shy of the $83.7 million for the whole of last year, based on figures compiled by Colliers International. The second quarter of 2009 saw a total $54.5 million of auction deals after a quiet Q1, with $17.9 million.

    The momentum is expected to continue. Colliers' deputy managing director and auctioneer Grace Ng predicts that full-year 2009 auction sales could exceed $160 million - almost twice the figure in 2008.

    Jones Lang LaSalle, which yesterday conducted its last scheduled auction for Q2, saw four properties change hands for a total of $11.3 million. One was a 7,232 square foot vacant freehold plot in Fernhill Road that was sold for $6.4 million, working out to $632 per square foot (psf) of potential gross floor area. The Singaporean buyer is expected to develop the residential site, which can be built up to five storeys, for his family's use, according to JLL's head of auctions, Mok Sze Sze.

    Another big-ticket item sold was a 12th floor unit in Leonie Towers, a freehold condo that is more than 30 years old. The 2,906 sq ft maisonette sold for $3.45 million or $1,187 psf of strata area. 'The buyer is a company. We held two viewings for the property over the past week, and it attracted around 70-80 parties,' Ms Mok said. The sheriff's sale was held to recover a debt owed by the owner to two individuals. There is also an oustanding mortgage on the asset.

    Residential properties accounted for almost half of the $72.4 million of auction sales in the first half, followed by industrial properties, with a 19 per cent share, Colliers' analysis shows.

    It noted that activity in the auction market picked up dramatically from late March, when the stock market rallied. 'Based on historical observations, property auctions have always been an accurate barometer of market confidence, and are usually swift in reflecting any changes in market sentiments,' the firm said.

    Colliers also noted that 77 per cent of the 440 properties put up for auction in the first half were offered by their owners, leaving only a 23 per cent share for mortgagee sales. 'Historically, from 1998 to 2006, the number of mortgagee properties always tended to be higher than the number of properties put up by owners. The trend started to reverse in 2007,' said Colliers' Ms Ng.

    DTZ senior director and auctioneer Shaun Poh has noticed keen participation by property investors at his firm's recent auctions. 'Small investors are particularly aggressive in bidding for smallish apartments in the central area, for example, Icon, The Clift, even an old development like International Plaza,' he said. 'Generally, properties priced between $700,000 and $1.3 million tend to move very fast.'

    Knight Frank executive director Mary Sai, another veteran auctioneer, said that attendances, as well as success rates, at auctions have gone up markedly since April.

    'However, there is a sense of caution among bidders. They don't want to be overly financially stretched,' she said. 'A clever move by some bidders now is to make a counter offer to the auctioneer's opening price. So they start within their comfort zone. Eventually, however, the bidding competition will draw out the true price level, often surpassing the opening price.'

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    Default Auction sales surge in first half to $72m

    June 27, 2009 Saturday

    Auction sales surge in first half to $72m

    Figures show uplift in property market over the past few months

    By Joyce Teo, Property Correspondent

    AUCTION sales have surged in the first half of this year, with the number of transactions dramatically higher than what was clocked up last year.

    The numbers tell a story of a property market rapidly gaining in confidence, especially in recent months, according to consultancy Colliers International yesterday.

    Sales in the first half reached $72.39 million. That is 61 per cent up on the $45 million recorded in the second half of last year, and 87 per cent higher than the $38.64 million racked up in the same period a year ago.

    Much of the pickup happened in the second quarter, after the stock market rallied and sentiment improved. This month has seen strong sales of $24.7 million, compared with the miserable $3.6 million sales in January and $1.4 million in February.

    Jones Lang LaSalle, which conducted the last auction for this month yesterday, said it sold four properties worth $11.29 million, including a $3.45 million Leonie Towers apartment.

    Sales were lacklustre in the first quarter because buyers had bid very low and opportunistic prices, said Ms Grace Ng, Colliers' deputy managing director (agency and business services) and auctioneer.

    The mood in auction rooms now is decidedly more upbeat, with sellers keen on repricing properties about 5 per cent to 10 per cent higher, said Knight Frank auctioneer Mary Sai.

    But the increased expectations do not signal a clear price rise yet. 'Prices were lagging behind the market so the sellers were moving up to match the market,' Ms Sai said. 'Those that we sold were mostly the $800,000 to $1 million types. These are the safe buys as mass market homes aren't likely to retreat much.'

    The buying mood has even carried over from mass market homes to some landed and high-end property, said Ms Ng. These include two apartments at The Clift worth $605,000 and $1.047 million.

    Few mortgagee sales have occurred this year despite the weak economic climate. The 103 repossessed units on the block represented only about 23 per cent of total properties put up for auction in the first half. This compares with 28 per cent last year, 44 per cent in 2007 and 50 per cent in 1998.

    The number is about half of what was put up during the Asian financial crisis in 1998.

    In all, there were 54 homes sold through auction in the first half.

    'The continued low number of mortgagee sales could be partly attributed to financial institutions attempting to manage their distressed asset portfolio by giving property owners the opportunity to dispose of the property of their own accord,' said Ms Ng. 'There will be less contention over the sale price, as the price is determined through a consultation process with the owner.'

    Ms Ng expects to see more mortgagee sales in the second half of the year due to the general lag time of approximately six months or more.

    Ms Ng also expects the buying momentum to persist in the next few months, possibly leading average monthly auction sales to surpass $30 million in some months. That could send auction sales over $160 million for the year, almost twice the $83.67 million achieved last year, she said.

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