Residential property auctions may rebound in 1H 2014: Knight Frank

Mortgagee sales look especially promising.

Residential property auctions might have hit a rut in 4Q 2013 with a disappointing 0% success rate, but the next two quarters should see some resurgence, according to Knight Frank.

The research firm predicts that the auction market will see more mortgagee sales especially for residential properties.

"Due to the cooling measures and the TDSR which resulted in weaker property demand, the likelihood of receiving more enquiries to put up properties for auction, particularly under mortgagee sales, is expected in the first half of 2014," said Knight Frank.

So far, potential buyers have been adopting a wait-and-see approach in view of current market weakness.

Knight Frank said these potential buyers who are cash rich are simply waiting for any price moderation before jumping into the market, whereas sellers could be more realistic in their asking prices given the current slow market with low volume of transactions.

The positive outlook comes even after early data for the month of January 2014 showed that only a total of 35 properties were put up for auctions, which is a 12.5 percent decrease year-on-year (y-o-y).

Also, only 1 property was sold via the auction market in January 2014, compared to 3 properties transacted in January 2013.

Still, Knight Frank insists that there is a rising volume of enquiries on the properties to be put up for auction, as well as more sellers wanting to know about the process of auction, which may result in an increase of owners’ sale under auction in 2014.