Singapore auction market posted higher success rates in 2020

January 26, 2021

property auction

Despite a fall in auction listings from 1,387 in 2019 to 497 in 2020, the auction market still posted higher success rates, increasing to 3.6% from 1.4% in the previous year.

Singapore saw total auction listings, including repeat listings, for 2020 fell to 495 from 1,387 in 2019 as physical auctions were barred for most of the second quarter and third quarter of 2020 due to circuit breaker measures as well as safe distancing restrictions, revealed a Knight Frank report.

Despite this, the auction market still posted higher success rates in 2020, increasing to 3.6% from 1.4% in the previous year.

This comes as demand for landed homes and industrial properties “boosted successful sales during the limited auctions held in the year”, said Knight Frank.

As auctions resumed in Q4 2020, success rate spiked to 8.1%.

With only two quarters of auction activity, mortgagee sale listings (including repeat listings) fell 51.7% year-on-year to 304 listings in 2020.

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Successful mortgagee sales made up 78.2% of 2020’s total gross sales value at $22.9 million, as the pandemic took its toll on businesses and individuals.

Of the mortgagee listings in 2020, residential properties accounted for 46.1% at 140. Of these, 39 were landed homes and 101 were non-landed home listings.

“Fuelled by demand for bigger living and open spaces, five landed mortgagee properties were sold during auction compared to none in 2019,” said the report.

“Of the five sales, four were snapped up during the first auction attempt at prices above or at their opening price. All four were located outside of the traditional prime districts in Districts 12 (Balestier, Toa Payoh, Serangoon), 19 (Serangoon Garden, Hougang, Ponggol) and 21 (Upper Bukit Timah, Clementi Park, Ulu Pandan).”

Year 2020 also saw 97 industrial mortgagee listings, with 56 listing in Q1 2020 and 41 in Q4 2020.

Knight Frank noted that seven industrial properties were sold in Q4 2020 alone. The properties were situated in more accessible locations like Lavender Street and close to regional centres of Woodlands and Tampines.

Priced at below $1.5 million, the industrial properties were smaller than 2,500 sq ft and were likely acquired for owner occupation.

Meanwhile, there were 51 retail mortgagee listings in 2020, of which 19 were located in District 14 along Geylang, Jalan Eunos and Changi Road.

All but one had floor areas of less than 1,000 sq ft.

In 2020, owner sale listings fell 73.8% to 180 from 687 in 2019.

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“The extension of loan repayment deferrals beyond 2021 might have provided some reprieve for owners to hold onto their property assets, temporarily allaying plans for divestment and owner sales,” said Knight Frank.

Out of the 106 residential owner sale listings, 38 were landed and 68 were non-landed listings.

A three-storey terrace home at Woodsville Close, emerged as the sole successful owner sale for 2020. It was sold under the hammer for $2,770,000, or 1.1% below the opening price, in October.

Looking ahead, Knight Frank expects more industrial, commercial and residential properties to be listed for auction this year as “a greater number of individuals are expected to face challenges servicing mortgages and financial pressure from creditors due to salary cuts or job losses”.

“While government support schemes like the extension of Singapore’s debt moratorium programme into 2021 will mitigate the fallout from the pandemic, the withdrawal of the main support measures will inevitably lead to some business attrition in 2021 despite the forecasted economic recovery,” it said.

Knight Frank expects strata industrial and strata retail properties (typically occupied by smaller businesses) to account for a significant proportion of 2021’s auction listings.

“Gross sales value is projected to double that of 2020 with sales volume likely to pick up from March, and success rates reaching around 5% of total listings in 2021,” it added.

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