Property shocker: Only 10 out of 198 auctioned properties were sold in 1H12

This marks the second lowest sales value garnered since the global financial crisis in 2008.

According to Colliers International, following subdued activities in the property market after the imposition of the Additional Buyer’s Stamp Duty1 (ABSD) in December last year, the Singapore property auction market got off to a muted start in Year 2012.

A total of 198 properties were put up for auction sale in 1H 2012; of which 7 were listed by mortgagees and the remaining 191 were put up by owners.

This continues the trend of declining mortgagee listings since Year 2007, which reflects the improved financial position of mortgagors on the back of the continued low interest rate and high liquidity environment, as well as a healthy rental market.

Of the 198 properties that were put up for sale at auctions in 1H 2012, 10 were sold, fetching a total sale value of S$34.3 million.

This marks the second lowest sales value garnered, since the onset of the global financial crisis in Year 2008; and is a distinct 50.5 per cent below the S$69.25 million amassed from the successful auction of 33 properties in 1H 2011.

The total sale value is, however, 30.1 per cent higher than the S$26.37 million achieved in 2H 2011 from the sale of 13 properties. 

Ms Grace Ng , Deputy Managing Director at Colliers International, says, “While there is a substantial 30.1 per cent increase in the total sale value in 1H 2012, it is largely attributed to the sale of a petrol station along Jalan Ahmad Ibrahim, which was sold for S$12.73 million.

Apart from the sale of the petrol station, the other high value transaction was a JTC factory at Loyang Way, which was sold for S$7.1 million. These two properties contributed to 57.8 per cent of the total auction sales during the first half of this year.”

The other eight properties that were auctioned off during the review period were mainly small- to mid-sized transactions – including three residential properties worth a total of S$7.19 million, three retail properties worth S$5.28 million and two factories worth S$2 million. The total sale value is, however, 30.1 per cent higher than the S$26.37 million achieved in 2H 2011 from the sale of 13 properties.

Secondary market activity in the residential sector evidently thinned in 1H 2012, as buyers and sellers adopted a wait-and-see attitude, while mulling over the implications of the newly implemented ABSD in December 2011.

The residential sector made up 21 per cent of the total auction sales in 1H 2012, with three residential transactions worth S$7.19 million. This is a 37.9 per cent decline from the S$11.57 million garnered from six transactions in 2H 2011.

The three residential properties that were sold under the hammer in 1H 2012 were a semi-detached house at Kelulut Hill in the Seletar area which was sold for S$2.66 million, a terrace house on Thomson Road which was sold for S$2.21 million and an apartment at Botanic Gardens View in prime district 10 that was sold for S$2.32 million.

Of these three transactions, two were landed properties; which reflected the appeal of such properties in land-scarce Singapore to buyers who are always on the lookout for attractive buys.

Meanwhile, non-residential properties constituted 79 per cent of all auction sales in 1H 2012.

Strong demand was seen for industrial properties during the review period – three industrial properties were sold for a total of S$9.1 million. They included a JTC factory at Loyang Way which was sold for S$7.1 million, a terrace factory at Tradehub21 located at Boon Lay Way for S$1.5 million and a flatted factory at Woodlands Link for S$500,000.

In the absence of stringent regulatory curbs, commercial properties, such as strata-titled shop units and shophouses, continued to attract investors due to the higher yields of between four and six per cent, as compared to only two and three per cent from residential properties.

Two strata-titled shops at Fortune Centre (Middle Road) and People’s Park Centre (Chinatown) were sold for S$450,000 and S$730,000, respectively. Additionally, two adjoining Housing Development Board shophouses at Marine Parade Central were sold for S$4.1 million.