Despite this, buyers are more discerning and cautious after the cooling measures, and they will likely seek auctions for good buys in the market, said an analyst.
The overall value of properties successfully auctioned off in Singapore sharply declined by 46.5 percent year-on-year to $55.3 million in 2018, according to a new report from Knight Frank.
At the same time, the number of properties sold under the hammer dropped by 25.5 percent year-on-year to 35, of which 26 are residential properties. The overall sales translate to a success rate of 3.1 percent, half the 6.2 percent recorded in 2017.
More: 7 Questions About Property Auctions
“Buyers are more discerning and cautious after the cooling measures and we expect this to continue in 2019. Hence, more buyers will likely seek auctions for good buys in the market,” said Sharon Lee, senior director and head of auction at Knight Frank.
The lower sales occurred even though the number of auction listings (excluding properties sold before and after auctions) jumped 47.4 percent to 1,120 on an annual basis.
In particular, the number of auction listings placed by mortgagees (lenders or banks) increased by 17.4 percent year-on-year to 391, of which 219 comprise residential properties.
Homes placed on the auction block by mortgagees edged up by 5.8 percent year-on-year due to higher interest rates arising from the US Federal Reserve’s rate hike. This resulted in the 3-month SIBOR increasing from 1.457 percent in Q4 2017 to 1.886 percent in the last quarter of 2018.
“The subdued rental market also contributed to higher number of listings under mortgagee sale. While the pickup of the secondary market between Q4 2017 and Q2 2018 helped push down the number of mortgagee listings under auction, the number of listings recovered after the cooling measures.”
Knight Frank noted that 26.9 percent of the properties put up for auction by banks are located in Districts 14 (Geylang, Eunos), 15 (Katong, Joo Chiat, Amber Road) and 16 (Bedok, Upper East Coast, Eastwood, Kew Drive). These comprised 23 landed homes and 35 non-landed properties.
“Landed homes priced above $3.0 million continued to take up a larger proportion of landed homes listed under mortgagee sale in 2018. There were 78 total listings from landed homes under mortgagee sale, out of which 62.8 percent had an opening price above $3.0 million,” noted the property consultancy.
What are property auctions? For more information, read our buying guide.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
