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Property auction listings in 2018 reach record high amid slower sales

by • March 14, 2019 • Auction, Research and AnalysisComments (0)388

– 1,088 property auction listings (including re-listings) in 2018, representing a 35% increase over 2017. (Figures include results from all auction houses in Singapore. Re-listings are included in auction listings. Properties sold before or after the auction are not included in auction sales.)

– Residential properties continued to account for the lion’s share of property auction listings, making up 48% of the full-year total in 2018.

– Colliers expects property auction listings and sales to grow in 2019 as residential cooling measures continue to bite, and interest for non-residential properties grows.

Colliers International today released its Colliers Flash report which tracked transactions and listings in the property auction market in Singapore during the second half (H2) of 2018.

Record property auction listings

PROPERTY AUCTION LISTINGS

Screengrab: Colliers
PROPERTY AUCTION LISTINGS: Record high on a yearly basis

Based on Colliers’ research, the properties put up for auction in H2 2018 totaled 634 listings (including re-listings), up by 40% from the first half (H1) and 47% year-on-year (YOY). This took total auction listings in 2018 to 1,088 (including re-listings), an increase of 35% over 2017 and the highest annual level since the start of Colliers’ database in 2008.

The annual growth was driven mainly by residential and industrial listings, and a record number of properties being put up for mortgagee sales by banks. Of the 1,088 listings in 2018, 43% (or 472 listings) of them were mortgagee listings – this represents a 27% rise in mortgagee listings from 2017. Meanwhile, owners’ listings also witnessed strong growth with 616 listings in 2018, up 43% YOY.

“1,088 listings: The total number of auction listings in 2018, an increase of 35% over 2017 and the highest annual level since the start of our database in 2008. Out of total listings, 518 or 48% were residential properties.”

Ms. Tricia Song, Head of Research for Singapore, Colliers International, said “Going by our data, the number of mortgagee listings has risen gradually in the last five years, possibly stemming from the bull run in the market in 2011, 2012 and 2013 where some buyers might have snapped up units at elevated prices, and subsequently found themselves unable to service the mortgage payments. This year, we expect property auction listings – both owners’ and mortgagee listings – and sales to grow as cooling measures continue to bite for the residential segment and more owners putting up non-residential properties for sale.”

2018 property market cooling measures tempered price increase and land sales activities

Fewer transactions in 2018 as residential sales slowed

With the 14 properties sold via auction in H2 2018, the total number of auction sales in 2018 rose to 35 properties – down by 27% YOY from 48 properties transacted in 2017.

Mr. Steven Tan, Director of Capital Markets & Investment Services at Colliers International, said, “We notice that the success rate of properties sold at auction dropped from 6.0% in 2017 to 3.2% in 2018, reflecting investors’ cautious approach and a widening price gap between buyers and sellers.”

“3.2%: The success rate in 2018, a drop from 6.0% in 2017. The total number of auction sales in 2018 declined by 27% yoy to 35 transactions. Of these, 24 were mortgagee sales, comprising 16 residential units, six industrial units, one retail unit and one office unit.”

Of the 35 auction sales in 2018, 10 transactions – comprising eight non-landed residential properties and two industrial units – valued at a combined SGD12 million were closed in Colliers’ auction. Colliers’ largest deal in 2018 was the sale of a condominium unit at Botanic Gardens Mansion for at SGD2.65 million.

Colliers Research: Industrial property market sector is continuing to find its footing

Due to fewer properties transacted, the aggregate value of properties sold at auctions in H2 2018 dropped 56% from H1 2018 and 74% YOY to SGD15.7 million. Total aggregate value of auction sales in 2018 stood at SGD51.0 million, less than half of the SGD107.2 million transacted in 2017.

“26.5%: The yoy increase of mortgagee listings in 2018 over 2017. The total number of mortgagee listings reached 472 in 2018, the highest annual level in our database. All sectors, except for office, recorded an all-time high on an annual basis.”

Mr. Tan added, “With more varied assets up for auction, we expect successful auction sales volume and value to grow in 2019. In addition, we could see rising demand from many collective sale beneficiaries who have sold their property in the past two years turning to the auction market for immediately-available replacement homes. We would recommend auction as a good platform to list or buy properties for optimal exposure and pricing.”

“SGD51.0 million: Total aggregate value of auction sales in 2018, which was down 52% from the SGD107.2 million transacted in 2017. Mortgagee sales value accounted for 60% of total auction sales value in 2018.”

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