Auction Listings Ballooned Value 1 Bil 1H2024 Average Prices Continued Rise

The value of properties listed for auction in the first half of 2024 has surpassed $1 billion, signaling a significant increase from the previous year. This is based on data from SRI’s auction team, which tracked a total of 211 properties on the market. Out of these, 139 were owner sales, while the remaining 72 were mortgagee sales. These figures include properties that were withdrawn from auction and later reappeared at other auctions. According to Mok Sze Sze, managing partner of auctions and sales at SRI, this marks a 49.5% increase in value compared to the $669 million worth of properties listed for auction in the first half of 2023. The surge in value can be attributed to two main factors: an increase in the number of properties being put up for auction and a rise in the average opening prices of these properties. Read also: Fewer mortgagee sale listings in first quarter of 2024, but owner sale listings up 48% year-on-year Advertisement Auctions gaining popularity The first half of 2024 saw 27.1% more properties being listed for auction compared to the same period in the previous year. “Over the years, auctions have gained popularity as the preferred mode of sale,” says Alison Lee, head of auction and sales at ERA Singapore. This can be attributed to the transparent nature of auctions. In the event that more than one bid is placed, the competition can drive up prices and reflect the property’s maximum value in the current market conditions, Lee explains. A notable example is the sale of a 1,248 sq ft three-bedroom unit at Dover Parkview in Dover Rise. The condominium’s management corporation strata title board (MCST) put the property up for auction at Knight Frank’s auction in May, with an opening price of $1.7 million. After receiving seven bids from three parties, the property was sold for $1.82 million ($1,458 psf). A 1,248 sq ft, three-bedroom unit at Dover Parkview saw seven bids from three parties before it went under the hammer for $1.82 million (Credit: Knight Frank) The current high interest rate environment and tougher market conditions have resulted in a spike in mortgagee sales at auctions. According to SRI’s data, the number of mortgagee sales increased by 30.9% year-on-year to 72 in the first half of 2024, from 55 in the same period in 2023. The most significant increase in mortgagee sales occurred in the second quarter of 2024, which saw 47 listings — an 88% quarter-on-quarter increase from 25 in the first quarter of the year. In contrast, the number of owners’ auction listings increased at a more moderate pace of 25.2% year-on-year to 139 in the first half of 2024, from 111 in the same period in 2023. Recent transactions at Dover Parkview tabulated by EP Buddy. (Source: EdgeProp Singapore, URA) Rise in average opening prices SRI’s market data also showed an increase in average opening prices at auctions over the past 18 months. In the first half of 2024, the average opening price for the 211 properties listed for auction was $4.74 million. Over the same period in 2023, the average opening price for the 166 properties listed for auction was $4.03 million. This marks a 17.6% surge in average quantum price on a year-on-year basis. Read also: Owner sale listings jump by 84.6% y-o-y in the first two months of 2024, while opening prices more than doubled Advertisement When the figures were further broken down, the average guide price for mortgagee sale listings saw a larger increase than that for owners’ sales. Based on SRI’s data, the average guide price for a property listed for mortgagee sale in the first half of 2024 was $2.85 million, up by 20.25% from $2.37 million in the first half of 2023. In contrast, the average guide price for an owner’s sale rose by 17.7% to $5.72 million in the first half of 2024, from $4.86 million in the first half of 2023. SRI’s Mok attributes the contrast to the higher-value properties that are being listed in auctions as mortgagee sales. Out of the eight properties sold at auctions in the first half of 2024, the three most expensive ones in terms of absolute price were freehold properties sold via mortgagee sales. The most expensive property sold at an auction was a 3,261 sq ft freehold maisonette at Villa Delle Rose, located off Holland Road in prime District 10. It fetched $5.4 million ($1,656 psf) at Knight Frank’s auction in January. Higher-value properties are making their debut in auctions as mortgagee sales (Credit: Knight Frank) The second-highest-priced property sold under the hammer was a 3,143 sq ft freehold warehouse unit at 178 Paya Lebar along Paya Lebar Road. Zoned for B1 light industrial use, it was sold for $4.08 million at Edmund Tie’s auction in May. Read also: Higher mortgagee sale listings at auctions in third quarter of 2023 amid tough economic conditions Advertisement In third place was a 1,410 sq ft three-bedroom unit at The Sea View condo located on Amber Road in prime District 15. Knight Frank put the property up for auction in February, with an opening price of $3.5 million. It was later sold for $3.6 million ($2,553 psf). A 1,410 sq ft, three-bedroom unit at The Sea View condo was put up for auction in February at $3.5 million before selling for $3.6 million (Photo: Samuel Isaac Chua / EdgeProp Singapore) Majority of properties sold via private treaty Nevertheless, the majority of properties are still sold via private treaty after making their debut on the auction market. ERA’s Lee observes that properties sold at auctions tend to be freehold properties located in prime areas that are priced attractively. “These days, most of the sales are transacted outside the auction room as prospective buyers prefer to negotiate directly with the buyer through private treaty,” she adds. Lee points to two properties listed for auction by ERA that were sold before and after the auction. Joy Tan, head of auction and sale at Edmund Tie, says her team sold one property at auction and three others via private treaty for $4.5 million from January to June. Meanwhile, according to Mok, SRI’s auction team managed to clear two properties at auction and 10 properties via private treaty, amounting to more than $20 million in total, in the first half of 2024. Edmund Tie’s Tan believes that more owners who purchased residential property during the pandemic are likely to choose auctions as the mode of asset disposal. She attributes the increase to the twin prospects of higher interest rates and future competition as the government ramps up supply via the government land sales programme. Tan predicts that the number of mortgagee listings this year could be on par with the 105 seen last year. She also expects owners’ sales to continue to outnumber mortgagee listings this year. However, SRI’s Mok and ERA’s Lee hold a different view. They expect the number of mortgagee sales in the second half of 2024 to surpass those in the first half of the year, as the unemployment rate creeps up and interest rates remain high.

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