Auction listings hit record-high in 2019 with 1,458 listings

Residential properties led the listings with 798 units.

Total auction listings in Singapore rose by 34% YoY in 2019 to a new high to 1,458 listings from 2018’s 1,088 listings, according to a report by Colliers.

Nearly 52% of the total listings were mortgagee sales at 751 listings. This is a 59.1% increase YoY.

Meanwhile, total owner listings similarly jumped by 14.8% to 707, as owners continued to sell their properties via auctions for maximum exposure and a higher chance to achieve optimal prices, noted the report.

The number of listings rose across the board, with residential properties leading with 798 listings, followed by retail listings at 302, and industrial listings at 306.

Of the mortgagee sale listings, the residential sector accounted for 57.5% of the total listings at 432. Retail mortgagee listings also increased by 72.7% YoY to 114, whilst office mortgagee listings recorded 16 up from two in 2018. Meanwhile, industrial mortgagee listings jumped 29.5% to 189.

Colliers’ head of research Tricia Song believes that higher mortgage payments partially drove the increase in residential mortgagee sale listings due to rising interest rates from 2015-2019, coupled with a subdued residential rental market.

“Following the cooling measures in July 2018, it is possible that more distressed owners were unable to immediately dispose of properties and may have defaulted on their loans,” added Song.

Meanwhile, auction sales continued to fall in 2019 with a 40% decline to 21 properties, from 35 properties knocked down during auctions in 2018. Of the 21 units sold, 11 were non-landed residential units, nine were strata-titled industrial and retail units, with one shophouse.

With rising listings, the success rate also fell further to 1.4% in 2019, much lower than the 3.2% achieved in 2018.

Despite this, the total aggregate value of properties sold at auctions remained relatively stable at $50.1m, a marginal decline of 1.7% YoY, noted the report.

 “We believe the declining success rate reflects the continued price gap between buyers and sellers. We also noticed that only 8 out of the 21 properties sold during auctions were transacted above their respective opening prices, indicating that buyers remained cautious,” said Steven Tan, senior director of capital markets at Colliers.

Colliers expects total listings to grow by 10% in 2020 as more properties are put up for sale amidst an uncertain environment, particularly in view of the potential economic impact of the COVID-19 outbreak.

Song further noted that auction sales and success rate may improve as the price gap between sellers and prospects is expected to contract.