Property auction success rates rise in 2020 despite fewer listings: Knight Frank

SINGAPORE (THE BUSINESS TIMES) – With physical auctions barred for the most part of the year due to circuit breaker measures and safe distancing restrictions, there were only 495 auction listings in 2020 compared with 1,387 in 2019, inclusive of repeat listings.

Demand for landed homes and industrial properties nonetheless drove success rates to an increased 3.6 per cent in 2020 from 1.4 per cent in the previous year, according to Knight Frank Singapore in its new research report on Monday (Jan 25).

As there were only two quarters of auction activity in the first and fourth quarters, mortgagee sale listings for 2020 declined a substantial 51.7 per cent year on year to 304. Some 46.1 per cent of the mortgagee sale listings comprised 140 residential properties, of which 39 were landed.

The property consultancy notes in its report that there were five landed mortgagee properties sold during auction for the year compared with none in 2019. This was attributed to demand for bigger living and open spaces.

Four of these properties were located outside the traditional prime districts in Districts 12, 19 and 21: District 12 (Balestier, Toa Payoh and Serangoon); 19 (Serangoon Garden, Hougang and Punggol); and 21 (Upper Bukit Timah, Clementi Park and Ulu Pandan). They were snapped up during the first auction attempt at prices either above or at their opening price, said Knight Frank.

Industrial mortgagee listings also contributed to a significant proportion of auctions for the year with a total of 97 listings.

Seven industrial properties were sold in the fourth quarter of 2020 alone. Based on Knight Frank’s observations, these properties were in more accessible locations such as Lavender Street and close to the regional centres of Tampines and Woodlands. As they were also smaller than 2,500 sq ft and sold for below $1.5 million, the consultancy believes they were likely purchased for owner occupation.

Fifty-one retail mortgagee listings were recorded for the whole of 2021, and all but one had floor areas under 1,000 sq ft.

Meanwhile, owner sale listings for the year plunged 73.8 per cent to 180 against 687 in 2019. This could be due to the extension of loan repayment deferrals beyond 2021, said Knight Frank, as owners were able to temporarily delay plans for divestment and owner sales.

Out of the 106 residential owner sale listings for the year, 68 were non-landed listings that were fairly evenly spread across all districts.

The sole successful owner sale in 2020 was a three-storey terrace house in Woodsville Close, which sold under the hammer in October for nearly $2.8 million, 1.1 per cent below the opening price.

Going into 2021, Knight Frank is expecting an increase in mortgagee listings among businesses housed in industrial and commercial properties as the Government begins to withdraw main support measures in relation to Covid-19.

The consultancy is also anticipating more residential properties to list, as a great number of individuals face challenges servicing mortgages and financial pressure from creditors due to salary cuts or job losses.

“Strata retail and strata industrial properties will likely be impacted and will make up a significant proportion of auction listings in 2021. 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 per cent of total listings in 2021,” said Knight Frank.

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