Property auctions in Singapore are expected to gain momentum following a slowdown in 2013 amid market challenges, revealed a Knight Frank report.
It noted that while the number of properties put up for auction increased by 41 percent in 2013, the figure sold in each quarter continued on a downward trend, on the back of cooling measures and in particular the Total Debt Servicing Ratio (TDSR) framework.
The total auction sales value fell 15.2 percent to $3.9 million in Q4 2013 from $4.6 million in the previous quarter. This has been on a downward trajectory since Q2 2013.
Nonetheless, last year’s total sales value of $99.6 million surpassed the $49.2 million achieved in 2012.
Residential auctions “remained muted as potential buyers largely adopted a wait-and-see approach, in anticipation of further price adjustments by sellers,” said Sharon Lee, Director and Head of Auctions at Knight Frank Singapore.
The firm revealed that of the 58 residential properties put up for auction in Q4 2013, 69 percent were non-landed homes, while the remaining 31 percent comprised detached, semi-detached and terraced houses.
Although the number of residential properties put up for auction remained relatively inert, their success rate was zero in Q4 2013, a result that is unprecedented going back as far as 2004.
Meanwhile, only one property was sold by auction in January 2014 compared to three during the same month last year, as the property sector is still constrained by the cooling measures and TDSR.
In view of the current market weakness, Knight Frank believes that potential buyers will adopt a wait-and-see approach.
However, it expects to see more mortgage sales, particularly for residential properties, in the first half of the year.
Knight Frank also noted that there is a growing volume of enquiries on properties to be put up for auction, as well as more sellers wanting to know about the auction process, which could result in a hike of owners’ sale under auction in 2014.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
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