Property auctions going, going upwards
The
Business Times | March 30, 2013
Total sales value so far
this year higher than all of 2012
The
property auctions market jumped back to life in the first quarter following a
sleepy 2012, with total sales value in the first three months alone exceeding
that for the whole of 2012, said Colliers International.
The
auctions market recorded a total sales value of $76.08 million from January to
March this year, exceeding the $62.44 million chalked up for the entire 2012.
The figures exclude the sale of land put up by statutory boards through
auction.
Colliers
now expects more than $150 million worth of transactions for the market this
year.
The
first quarter's strong showing came despite the lull in the secondary market -
a result of the recent round of government cooling measures implemented in the
residential sector. Helping to pick up the slack, however, were four high-value
sales, involving mostly commercial and industrial units, which generated a
total sales value of $70.1 million. Together, the four transactions accounted
for 92.1 per cent of the quarter's total sales value. Of the four, two involved
shophouses.
Said
Grace Ng, deputy managing director at Colliers International: "Shophouses
are a main draw for investors, as such property types are not affected by the
punitive measures, such as the Additional Buyer's Stamp Duty or Seller's Stamp
Duty, among others.
"Additionally,
given that shophouses typically generate yields in the region of 2-4 per cent
per annum, investors who are on the lookout for alternative investments to bank
deposits which offer an average paltry interest rate of less than one per cent
per annum, would find shophouses a more appealing proposition."
Among
the four high-value deals was the sale of a Good Class Bungalow at Chee Hoon
Avenue close to the Botanic Gardens MRT station. It was sold for $22.9 million.
In
total, eight of the 113 properties put up for sale by auction were sold. Most
of the properties put up for sale (103) were from owners, while 10 were listed
by mortgagees, noted Colliers.
Of
those sold, five were put up by owners while three were mortgagee sales - which
were concluded for a total value of $4.38 million. All four of the high-value
properties were put up by owners. The fifth property sold by an owner was a HDB
shophouse in Bedok that was knocked down at $1.6 million.
Said
Ms Ng: "Property auctions are also gaining traction with owners who own
high-value properties which are traditionally put up for sale via other modes such
as a private treaty, tender or expression of interest.
"The
phenomenon could be attributed to the organised marketing campaign which is
carried out in a transparent and targeted process, and the ability to reach out
to a wider pool of potential buyers from the generated publicity."
She
expects that more owners will put up high-value properties - in particular,
commercial and industrial properties - for sale by auction.
But
while the auction market will "continue to enjoy a healthy flow of
transactions in landed residential, commercial and industrial properties, the
number of residential apartments and condominium transactions is expected to be
low", said Ms Ng. This is due to the continued stalemate in the secondary
residential market between buyers and owners. "Buyers will continue to
adopt a wait-and-see attitude, hoping for downward price adjustments, while
owners are expected to hold on to their prices due to the current low interest
rate environment and the general reluctance to dispose the property now - a
result of the subsequent higher acquisition cost from the Additional Buyers'
Stamp Duty imposed by the government," she said.
Martin Koh | 86666
944 | R020968Z
Sherry Tang |
9844 4400 | R020241C
Senior Sales Director
DTZ Property
Network Pte Ltd (L3007960A)
Email: marshe_inc@yahoo.com.sg