Hungry Ghost property auction sales value hits 3-year high

This year’s Hungry Ghost Festival has spooked buyers in the property auction market, but enough cash was still burned up to set a three-year high in sales.

Property consultancy Colliers International said on Wednesday only 14 out of 85 properties put up for auction during the Hungry Ghost Festival, which began on August 20, were sold. That works out to a successful transaction rate of just 16.4 per cent.

Of the 85 properties put up for auction, 78 per cent were by property owners and only 22 per cent were mortgagee sales – the lowest figure in 12 years.

Colliers attributes the low number of mortgagee sales to the sanguine market as owners who are in default may now find it easier to sell their assets in the open market.

Moreover, financial institutions are managing their non-performing loans by giving owners the opportunity to dispose their properties within a defined time period.

The total auction sales value came up to S$25.92 million – the highest amount recorded in three years.

Colliers said about half of this year’s sales figure was due to the successful auction of four infill sites by the Singapore Land Authority.

The residential sector saw the best results, chalking up S$18.98 million worth of sales. Retail was the next best-performing sector, with sales of shophouses and strata-titled shops totalling S$6.83 million.

Colliers said the recent withdrawal of the interest absorption scheme and interest-only loan has minimal impact as the schemes are not applicable to the secondary market.

But it expects sales to taper off in the last two months due to year-end school holidays and festivities.

Source : Channel NewsAsia – 16 Sep 2009

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