Going, going, gone: Singapore’s auction success rates to breach 5% mark this year

Knight Frank says owner-occupiers and investors will continue to target value-purchases throughout the year. 

According to Knight Frank, there were a total of 200 listings (including repeat listings and excluding properties sold outside of auction) in Q2 2021, one less than in Q1 2021 even amid the Heightened Alert restrictions from mid-May. Owner sales listings accounted for half of the total listings in the quarter, more than the proportion of mortgagee sales at 43.5%. 

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Success rates (including repeat listings and excluding properties sold outside of auction) trended up from 3.5% in Q1 2021, reaching 6.5% in Q2 2021 as 13 properties sold for a total gross value of S$36.9 million. Despite a 31.6% q-o-q increase in owner listings, there were no owner sales during auctions as these sellers were generally not yet pressured to sell and held out on prices. Eight of the 13 listings sold were mortgagee sales and the remainder comprised sheriff and estate sales. 

In addition to the traditional properties offered on auction, an oil tanker seized by the police and subsequently auctioned drew 37 bids, and was eventually sold for S$5.75 million or 72.0% above the opening price.

Mortgagee sales Q2 2021 

There were 87 mortgagee sale listings in Q2 2021, 35 less than in Q1 2021. This was below the proportion in the previous two quarters which hovered above 60.0%. 

Residential properties made up 46.0% (40) of mortgagee sale listings in Q2 2021, of which 31 were nonlanded and nine landed home listings. Affluent buyers scouting for owner-occupation homes in the prime districts 9,10 and 11 paid a premium for bigger units. For instance, a 3,208-square foot (sf) freehold apartment at The Tate Residences (D9) sold for S$8.6 million, 9.1% above the opening price. 

Additionally, four other condominiums were sold under the hammer, all above their respective opening prices and below S$2 million. A 1,507-sf 5+1-bedroom (BR) executive condominium at the Sea Horizon (D18) sold for S$1.6 million, 15.1% above the opening price. Falling in the “sweet spot” of below S$2.0 million, suburban apartments provided an alternative for buyers who prioritised larger living areas together with relatively modest budgets. 

Industrial mortgagee listings declined to 18 in Q2 2021 after a high of 56 listings in Q1 2020. Bought by an end-user for business expansion, an industrial unit at Enterprise Hub sold for S$915,000, more than 30% above the opening price. 

Four amalgamated strata office units on the 12th floor of GB Building were also sold at auction for S$9.9 million. The central location was a draw for buyers with office users in the process of right-sizing.

Owner sales

There were 100 owner sale listings in Q2 2021, up from 76 in Q1 2021. While owners increasingly ventured onto the auction route to divest their properties, price expectations remained high as many were not in immediate distress. This is especially so for most owners of landed properties where the price index rose 6.3% in the six months since the start of 2021. 

The increase stemmed largely from the non-landed residential sector, where there were 41 owner sale listings compared to 28 in the previous quarter. Out of the 41 listings, 12 were in District 9 and 10 with a mixture of two and three-bedroom apartments in projects like Sophia Hills and Draycott Eight. This included a 2,798-sf three-bedroom penthouse in Leonie Hill Residences opening for S$5.0 million. Landed properties remained in limited supply with only eight listings.

Market outlook

Despite some expectations that auction listings would spike in early 2021 due to the pandemic-led recession in 2020, the number of auction listings did not surge with 201 in Q1 2021 and 200 in Q2 2021, similar to the 198 in Q4 2020. Nevertheless, listings are expected to increase moderately in H2 2021 along with increased success rates during auctions and as “pent-up supply” resurfaces later in the year. Both owner-occupiers and investors are likely to continue to target value-purchases. 

As such, auction success rates for the whole of 2021 should surpass 5% with increased auction inventory and optimistic GDP growth. Nonetheless, recurring waves of community infections leading to regressive restrictions can disrupt auction schedules in the coming months until such time as herd immunity is achieved through the national vaccination programme