Property auction market to recover in 2H12

Auction activities in 2H 2012 are projected to turn in more than S$30 million worth of sales transactions.

Ms Grace Ng , Deputy Managing Director at Colliers International, says, “Looking forward, in light of the sustained high liquidity and low interest rate environment, the low level of mortgagee sale is expected to continue into the second half of 2012. However, the market could potentially see some high-end residential properties surfacing as mortgagee sale. This is owing to the implementation of ABSD, which resulted in the subdued level of market activities in the high-end residential sector. Property owners who have difficulties in keeping up with their mortgage loans and disposing their properties in the open market, could then be forced to give up such properties.

Driven by the current exuberance of launches of private residential properties in the mass market, the property auction market in 2H 2012 may see a pick-up in residential sales – the result of a spillover in the buoyant buying interest. Astute buyers are expected to look for value buys in the resale market, amid new residential projects in suburban areas achieving record-breaking prices.”

The absence of anti-speculative measures in the commercial and industrial sectors, coupled with the relatively-higher yields commanded by these properties, will continue to attract buyers’ interest in these segments.

Ms Ng concludes, “Auction activities in 2H 2012 are projected to turn in more than S$30 million worth of sales transactions.

In general, on the back of a subdued secondary market and the absence of high value sales in the residential sector, as well as a reduction in the number of mortgagee sale, the sales forecast for the auction market in Year 2012 will be, on average, some 27 per cent lower than last year.

The year could possibly end with approximately S$70 million worth of auction transactions, with commercial and industrial properties continuing to take the lead.” In the absence of stringent regulatory curbs, commercial properties, such as strata-titled shop units and shophouses, continued to attract investors due to the higher yields of between four and six per cent, as compared to only two and three per cent from residential properties.