Government’s cooling measures dampen property auction sales

The government’s property cooling measures have dampened the performance of auctioned properties in 2011.

Property consulting firm Colliers International said that out of 542 properties put up for auction this year, only 46 were sold.

These raked in S$95.62 million in sales value.

But it is much lower than the S$223.9 million achieved from the sale of 71 properties in 2010.

This year’s figure is also the lowest since 2008 when total sales value was at S$83.67 million.

Ms Grace Ng, deputy managing director of Colliers International, said: “The fall in both volume and value of sales at property auctions was in part the result of the Eurozone crisis and the ensuing volatile stock market, which rocked investors’ sentiments – leaving buyers with less bullish bids for properties put up for sale since August 2011.”

Sellers’ asking prices have also remained high and this stand-off has led sellers to lease out their properties instead.

Buyers, meanwhile, have turned their sights to shops and shophouses, which offer better yield of four to six per cent, compared to two to three per cent for residential properties, said Ms Ng.

This year, auctioned retail properties contributed 39.7 per cent to the total sale value while residential properties comprised 28.4 per cent.

On the industrial property front, around 13 were sold to hit total sales of S$14.18 million.

This is about 37.3 per cent higher than the S$10.33 million for 12 industrial properties sold a year ago when demand for smaller strata-titled units was strong.

Overall, Colliers says sales value for the auction market may also continue to fall in 2012 and may come close to the level it reached during the 2008 global financial crisis.

The firm warns that some industrial properties may even be put up for sale as small businesses face a tougher environment ahead.

Still, the low interest rate and high liquidity environment will continue to prop up the property auction market.

Colliers also sees healthy demand for landed residential properties and old apartments in secondary markets.

But with foreigners kept at bay by the government’s latest move on stamp duties, sales of residential properties may be affected.

Source : Channel NewsAsia – 16 Dec 2011

Join The Discussion

Compare listings