Auction Listings Ballooned Value 1 Bil 1H2024 Average Prices Continued Rise
The total value of properties listed for auction in the first half of 2024 has crossed the $1 billion mark, as reported by SRI’s auction team. Out of the 211 properties listed, 139 were owners’ sales, and 72 were mortgagee sales. These numbers also include properties that were previously listed for auction but were later withdrawn and sold at other auctions.
According to Mok Sze Sze, managing partner of auctions and sales at SRI, the total value of auction properties listed for sale has increased by 49.5% compared to the same period last year. This increase can be attributed to two main factors – a higher number of auction listings and a rise in the average opening prices of these properties.
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Alison Lee, head of auction and sales at ERA Singapore, says that auctions have become a popular mode of sale due to their transparent nature. In cases where there are multiple bids, the competition can drive up the prices, reflecting the property’s maximum value under current market conditions.
One example of this is the sale of a 1,248 sq ft, three-bedroom unit at Dover Parkview, which was put up for sale by the condo’s management corporation at Knight Frank’s auction in May. The property received seven bids from three parties and was sold for $1.82 million (1,458 psf).
The rise in mortgagee sales can be attributed to the high-interest-rate environment and tougher market conditions. SRI’s data shows a 30.9% increase in mortgagee sale listings compared to the same period last year. The second quarter of 2024 saw a significant spike in mortgagee sales, with 47 listings, an 88% quarterly increase.
On the other hand, owners’ sale listings had a more moderate growth rate of 25.2% compared to the same period last year. Recent transactions at Dover Parkview tabulated by EP Buddy. (Source: EdgeProp Singapore, URA)
The average opening prices at auctions have also shown a rise in the past 18 months, with an increase of 17.6% from the same period last year. SRI’s data shows that the average guide price for mortgagee sale listings had a bigger increase compared to owners’ sales. This is because higher-value properties are making their debut in auctions as mortgagee sales.
Three out of the top eight property sales at auctions in the first half of 2024 were freehold properties. The most expensive property sold at auction was a 3,261 sq ft, freehold maisonette at Villa Delle Rose, which went for $5.4 million (1,656 psf) at Knight Frank’s auction in January. (Credit: Knight Frank)
Despite this increase in auction listings, most properties are sold via private treaty. According to ERA’s Lee, properties sold at auctions tend to be attractively priced, freehold properties in prime locations. However, most sales are transacted outside the auction room, with buyers preferring to negotiate directly with the seller.
Edmund Tie’s Joy Tan says that her team sold one property at auction and three others via private treaty, totalling $4.5 million from January to June this year. SRI’s Mok confirms that their team cleared two properties at auction and 10 properties via private treaty, totalling more than $20 million in the first half of 2024.
Edmund Tie’s Tan believes that more owners who purchased residential properties during the pandemic are likely to choose auction as the mode of selling their assets. She also expects the number of mortgagee listings this year to be similar to 2023, while owners’ sale listings are expected to outnumber mortgagee listings.
However, SRI’s Mok and ERA’s Lee expect the number of mortgagee sales to surpass the first-half level as the unemployment rate creeps up and interest rates remain high.