The proportion of properties, by sales value, sold upon their first listing for auction has been increasing over the past three quarters, according to JLL’s data.
This proportion reached 90 percent in Q4 2014, higher than the 80 percent and 54 percent recorded in Q3 2014 and Q2 2014 respectively, largely attributed to a compromise of sellers’ and buyers’ price expectations.
According to JLL’s report, sellers are now more willing to lower price expectations in light of the weaker market conditions. The anticipation of a potential relaxation of cooling measures along with the expected rise of interest rates in the immediate horizon could have also encouraged buyers to make these purchases.
$72.5 million worth of assets were sold at auctions in 2014; 27 percent lower than the total sales of $99.6 million clocked in the preceding year.
Residential properties made up 72 percent of total sales value in Q4 2014. Notably, almost two-third of the listings came from the residential sector.
Mok Sze Sze, Head of Auction and Sales at JLL, said, “The success rate at auctions showed an uptick, partially due to the steady increase in mortgagee sales in recent quarters. We noticed that the softer leasing market has not deterred buyers’ investment sentiments.”
In 2013, 21 properties were sold, with 57 percent sold on a vacant possession basis. This year, it increased to 81 per cent. “This shows that purchasers have taken the downside risks into account and that the potential gain from the investment outweighs the risks,” Mok added.
She opined the auction market is likely to see more sales listings put up by mortgagees in 2015, and the bulk will be non-landed residential properties in the prime sub-markets and landed homes from the suburban sub-market. “The pace of sales in auctions is anticipated to be similar to 2014, as property prices are projected to slightly decline in general while the market fundaments will likely hold strong.”
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
