Knight Frank expects success rates to hit 5% of auction listings for the rest of 2021.
Singapore’s auction market registered a success rate of 3.5% in the first quarter of 2021, which is higher compared to pre-COVID-19 when the quarterly success rate was between 1% and 3%.
“This came as auction properties continued to garner interest among opportunistic retail investors looking for viable yields in a low interest rate climate,” said a Knight Frank report.
There were 201 auction listings in Q1 2021, which is largely similar to the 198 listings seen in Q4 2020. Of these, seven properties were sold under the hammer at a gross sales value of $13 million.
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In Q1 2021, mortgagee sale listings made up 60.7% of total auction listings, with 122 transactions. This figure is similar to Q4 2020.
Residential properties accounted for 45.9% of mortgagee sale listings at 56. Of these, 13 were landed and 43 were non-landed home listings.
Knight Frank noted that buyer’s interest in landed homes remained strong, with a semi-detached house in Aida Street sold at almost $500,000 higher than its opening price. A condominium at Melville Park was also sold for $690,000 in an auction.
Meanwhile, two residential properties comprising a condo unit at City Square Residences and a landed house at Kovan Close were sold at auction as a sheriff sale and an executor sale, respectively.
Retail mortgagee sale listings jumped 64% quarter-on-quarter and 57.5% year-on-year to 41 during the period under review, marking the highest quarterly total in Knight Frank’s records as some investors struggled with mortgage payments.
“However, opportunistic buyers are still active, with two units at Golden Mile Complex snapped up for a total of $610,000, likely with a view to possible en bloc potential,” said the report.
Industrial mortgagee listings, on the other hand, dropped from 41 in Q4 2020 to 25 in Q1 2021.
Despite the drop in listings, improved prospects and optimism in the industrial sector resulted in more enquiries and viewings, particularly for industrial properties with relatively affordable quantum of less than $1 million.
A freehold unit located at B2 factory M Space, for instance, was sold for $808,000 during an auction.
“With the opening prices of 16 of the 25 listings going at or below $1 million, success rates will likely increase in subsequent auctions,” said Knight Frank.
The report revealed that there were 76 owner sale listings during Q1 2021, up from Q4 2020’s 71.
“More individual owners have and currently are divesting their properties through auction with 36 owner listings in March, up from a monthly average of 22 from October 2020 (when up to 50 people were allowed at auctions) to February 2021,” it said.
Owner sale listings within the retail sector doubled to 26 in Q1 2021 from 13 in the previous quarter.
Although opening prices for some listings dropped, distress sales “were not evident with prices generally stable”.
Owner sale listings for residential properties stood at 36, comprising 28 non-landed and eight landed listings.
The landed properties had opening prices of above $2.7 million.
For non-landed properties, eight were located in Districts 9 and 10 which ranged from a 2,800 sq ft penthouse unit in Leonie Hill Residences priced at $5 million, to smaller one-bedroom apartments below 550 sq ft at Vida and Sophia Hills, starting below $1.2 million.
Looking ahead, Knight Frank expects more listings to surface, particularly for the harder-hit sectors in last year’s pandemic-led recession.
“Some distressed commercial properties might then be bought by both corporate and private wealth in search of attractive opportunities for more unique properties (such as strata office space or landed homes) or Small-and-Medium-Enterprises (SMEs) buying business space for their own-use,” it said.
Knight Frank expects success rates to hit 5% of auction listings for the rest of 2021.
Aside from commercial units with attractive opening prices, the property consultancy also forecast heightened interest for larger quantum lands sales due to their limited supply motivating upgraders.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
