More property owners are turning to the auction market as an alternative mode to increase their chances of selling off their properties amid a slowdown in resale activity, revealed a Knight Frank report.
In Q1 2014, the number of properties put up for auction increased by 13.4 percent on a quarterly basis and 21 percent year-on-year.
The residential sector formed the bulk of properties put up for auction, reporting a 51.2 percent share. This was followed by shops and shophouses which accounted for 21.3 percent, while industrial properties made up 18.9 percent. Offices and HDB shops took the remaining 3.9 percent and 4.7 percent share respectively.
Of the 65 residential properties put up for auction in Q1 2014, approximately 79 percent were non-landed properties whilst the remaining 21 percent comprised a variety of detached, semi-detached and terrace houses. Three residential properties were sold last quarter, a rebound from just one in the third quarter of last year, while no residential properties were sold via auction in Q4 2013.
In terms of transaction values, total auction sales value jumped more than four folds from $3.9 million in Q4 2013 to $17.9 million in Q1 2014. The residential sector, although behind the office market, made up 42 percent or about $7.5 million in sales value.
Going forward, with the property market still reeling from the TDSR framework and the property cooling measures, sales volume of properties in the open market is expected to remain low this quarter.
“Some buyers and sellers increasingly perceive auctions as an attractive channel to transact properties within their price expectations. This will likely lead to more properties being put up for auction, especially with the current property cooling measures in place,” said Knight Frank.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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