En bloc fever spreads to property auction market

Romesh NavaratnarajahMarch 29, 2018

Luxury apartments in Singapore.

More properties being sold at auction.

Investors are apparently searching for homes in the auction market that can be sold in future for a good profit via collective sale, according to an Edmund Tie & Co report released today (29 Mar).

“In the last six months, we noticed that older developments completed before 2000 are attracting more interest, with some investors looking to ride the en bloc wave. During the marketing period of the units, we often receive queries about the en bloc potential of the development,” said Joy Tan, the property consultancy’s head of auction and sales.

More: Sentosa Cove penthouse sold at $2.4 million loss

For instance, six out of the 11 units successfully auctioned off in Q1 2018 were built before 2000. In terms of value, these accounted for $10.23 million out of the $19.97 million total auction sales.

The most expensive unit was a house in the Leighwoods, a freehold condominium built in 1985, which was sold for $2.9 million. This is followed by the $2.5 million sale of a unit in Spring Grove, a 99-year-leasehold development completed in 1996. The remaining units were sold for between $620,000 and $1.71 million.

Overall, the number of properties sold in Singapore’s auction market rose from eight in Q1 2017 to 11 during the first quarter of 2018. Total value reached $19.97 million, up from $15.23 million in Q1 2017 and $9.62 million in the first quarter of 2016.

The most expensive residential property was a home in The Berth by the Cove, which was picked up for $3.25 million, followed by the Leighwoods unit and another residence in Spring Grove that was purchased for $2.5 million. The remaining residential units were priced from $620,000 to $2.23 million.

Specifically, one landed and eight non-landed homes were bought for a total of $15.56 million. The units sold are distributed evenly between core and non-core regions, compared to past auction sales wherein properties in non-core areas are more likely to be bought due to their lower prices.

“It is positive to see a strong start to the auction market in 2018, with an upward trend seen over the last two years,” Tan noted.

“We expect a steady increase in (auction) sales throughout this year, especially as owners who are cashing out on their successful en bloc sales begin to search for replacement units.”

Check out more properties up for auction.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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