Auction Listings Ballooned Value 1 Bil 1H2024 Average Prices Continued Rise
In the first half of 2024, the total value of auction properties listed for sale has surpassed $1 billion. This information is based on data collected by SRI’s auction team, tracking 211 properties. Out of the 211 listings, 139 were owner’s sales while 72 were mortgagee sales. These figures include properties that were withdrawn from auction but resurfaced at other auctions.
SRI’s managing partner of auctions and sales, Mok Sze Sze, shares that this billion-dollar milestone represents a 49.5% increase in value compared to the $669 million recorded across 166 listings in the first half of 2023. This jump in value can be attributed to two main factors – an increase in the number of properties being put up for auction and an increase in the average opening prices of these properties.
According to Alison Lee, head of auction and sales at ERA Singapore, auctions have become a popular mode of sale due to their transparent nature. In cases where there are multiple bids, competition can drive up prices and reflect the property’s maximum value in the current market conditions.
One example is the sale of a 1,248 sq ft three-bedroom unit at Dover Parkview in May. The condo’s management corporation strata title board (MCST) put it up for sale at an auction with an opening price of $1.7 million. Knight Frank received seven bids from three parties and sold it for $1.82 million ($1,458 psf).
This spike in mortgagee sales at auctions can be attributed to the high interest rate environment and tougher market conditions. According to SRI’s data, there was a 30.9% increase in mortgagee sale listings in the first half of 2024, compared to the same period in 2023. The highest spike occurred in the second quarter of 2024, with 47 listings, an 88% increase from the first quarter.
On the other hand, the increase in owner’s auction listings was more moderate, with a 25.2% increase in the first half of 2024 compared to the same period in 2023.
SRI’s data also showed a rise in the average opening prices at auctions over the past 18 months. In the first half of 2024, the average opening price for 211 properties put up for auction was $4.74 million, a 17.6% surge from the average opening price of $4.03 million for 166 properties in the same period in 2023.
When broken down further, the average guide price for mortgagee sale listings increased at a faster rate compared to owner’s sales. The average guide price for a property listed for mortgagee sale in the first half of 2024 was $2.85 million, a 20.25% increase from $2.37 million in the first half of 2023. In contrast, the average guide price for an owner’s sale was up 17.7% to $5.72 million in the first half of 2024 from $4.86 million in the first half of 2023.
Out of the eight properties sold at auctions in the first half of 2024, the three highest-priced deals were all mortgagee sales of freehold properties. The most expensive property sold at an auction was a 3,261 sq ft freehold maisonette at Villa Delle Rose in prime District 10, which was sold for $5.4 million ($1,656 psf) in January. The second-highest-priced property was a 3,143 sq ft freehold warehouse unit at 178 Paya Lebar, which went for $4.08 million in May. The third-highest-priced property was a 1,410 sq ft three-bedroom unit at The Sea View condo in prime District 15, which was sold for $3.6 million in February.
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However, most properties are actually sold via private treaty after making their debut on the auction market. According to ERA’s Lee, most sales are transacted outside the auction room as potential buyers prefer to negotiate directly with the seller through private treaty. Two properties listed for auction by ERA were sold before and after the auction.
Meanwhile, SRI and Edmund Tie’s teams also reported a higher number of properties being sold via private treaty compared to auctions. However, they believe that more owners who purchased properties during the pandemic may choose to sell via auctions due to the potential competition and higher interest rates during refinancing.
Looking ahead, Edmund Tie’s Tan predicts that the number of mortgagee sales this year could be similar to last year’s 105 listings. She also believes that owner’s sales will continue to outnumber mortgagee sales this year. On the other hand, SRI’s Mok and ERA’s Lee anticipate a higher number of mortgagee sales in the second half of 2024 due to the increase in unemployment rates and high interest rates.