There is less action in the auction property market this year. Figures showed that in 2008, there were 852 properties for auction compared to 1,302 in 2007 or down by 35 percent.
This amounts to a transaction of $69.1 million worth of properties, (excluding the final two auctions of the year) or 84 percent lower compared to $422.3 million in 2007.
According to Mary Sai, Knight Frank executive director, this sluggish activity may be because “distressed sales have yet to develop”. She further explained that because the property owners had not yet felt the full impact of the economic crises, they were therefore not yet being compelled by the prevailing conditions to sell their holdings, but continue to cling to them. This is in part due to a good employment rate in 2008.
Another reason was that rents were holding out, which enabled the owners to pay their mortgages, and even earn some income from them.
Miss Grace Ng of Colliers International however believed that there had been fewer mortgagees because borrowers were able to properly service their loans.
Shaun Poh of DTZ is expecting more auction sales in 2009. He predicts that in the first half of the year, auctions will be from property owners feeling the heat from their banks. Then in the second half of the year, there may be mortgagee sales as the banks take possession of defaulted properties.
An analysis of the properties put up for auction showed that residential homes composed 50 percent of the block