The Singapore property auction market has experienced a healthier second quarter after a lacklustre start in the first quarter this year.
According to Colliers International, the total value of properties sold increased by 48.5 per cent on a quarter-on-quarter basis to S$41.38 million in Q2.
The improved total sales value registered in the second quarter is contributed by a number of high-value non-residential property sales, instead of residential type that typically forms the largest proportion of auction sales.
Calling it an atypical phenomenon, deputy managing director of Colliers International Grace Ng said the second quarter saw an absence of high-value residential transactions, as well as a general drop in the value of residential sales.
Instead, there was a major shift in buyers’ focus to commercial and industrial properties.
Ms Ng said this could be attributed to buyers’ increasing price sensitivity and their wait-and-see attitude amid the more stringent cooling measures introduced in the residential sector, which diverted buying interests to non-residential sectors.
As a result, the total sales value in the first half tallied to S$69.25 million, generated from the sale of 33 properties.
This is 49.4 per cent down from the S$136.91 million garnered in the second half of last year and 20.4 per cent down from the S$86.99 million in the year-ago period.
Looking ahead, on the back of a robust economy and employment market, as well as the low-interest-rate environment, Colliers expects the number of properties put up for sale via auction to stay at a healthy level, with owners’ sale continuing to dominate and mortgagee sale remaining low.
Commercial and industrial properties will continue to appeal to investors, on the back of sustained spill-over demand from the residential sector.
Meanwhile, sales of landed properties are expected to pick up in the second half of 2011, as buyers and sellers adjust their respective expectations.
Colliers said demand for landed properties will be strong due to the unyielding desire among Singaporeans to own landed properties.
Ms Ng said she expects to see auction activities in the second half to turn in between S$70 million and S$80 million worth of transactions.
She added the auction property market is most likely to round up the year with a total sales value of some S$140 million to S$150 million.
Source : Channel NewsAsia – 30 Jun 2011