Channelnewsasia.com | 03 Apr 2013 12:16 AM
The Singapore property auction market witnessed a strong start to 2013. But some analysts have said the hot auction market is a worrying sign.
SINGAPORE : The Singapore property auction market witnessed a strong start to 2013.
The total sale value of S$76.08 million in the first three months of this year has already surpassed the S$62.44 million chalked up for the full year in 2012.
But some analysts have said the hot auction market is a worrying sign.
Four adjoining shophouses at North Bridge Road were sold at an auction for S$15 million - the third-highest transaction in the first quarter of 2013.
Market experts said that there is also a changing trend on the type of auctioned properties.
More than nine out of 10 properties being auctioned off now are by owners.
Grace Ng, deputy managing director of Colliers International, said: "About a decade ago, there was a stigma of an auction being perceived as a forced sale avenue, that is where mortgagees sales have been listed for auction. Owners that have difficulty servicing their loan get their property taken up by the banks. And these banks would put up the properties via auction mode. "
A property consultancy would usually conduct auctions once a month. And for two hours, some hundred bidders would be in a hotel ballroom hoping their budget can win them the property they are eyeing.
Property auctions also give sellers an alternative market to let go of their properties.
This is because sellers will have the opportunity to reach out to a group of bidders who will not usually respond to property agents.
Colin Tan, CEO of DistriCT65, said: "Some of these consultancies would have a certain profile of buyers who follow auctions. There is this group of buyers that follows auctions. In the current market situation where they have exhausted their means through property agents, and they can't sell them, auctions are an option for them."
Experts said properties valued at S$5 million and above would find it easier to be sold at auctions.
Real estate consultancy Colliers is projecting total auction sales transactions to hit more than S$150 million for the whole of 2013.
This comes as property transactions in the resale market are expected to slow down following government-imposed cooling measures on both residential and industrial properties.
From January 12, the Seller's Stamp Duty has been imposed on industrial properties sold within three years of purchase. For private residential properties, the Additional Buyers' Stamp Duty has been raised to between five and seven percentage points across the board.
Latest flash estimates from the Urban Redevelopment Authority (URA) showed overall private home prices in the first quarter of 2013 gained 0.5 per cent, lower than in the fourth quarter of 2012, when prices rose 1.8 per cent.
Actual price performance of commercial properties from the official URA Price Index will be released on April 26.
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