Auction Listings Ballooned Value 1 Bil 1H2024 Average Prices Continued Rise
Auction properties listed for sale hit $1billion in 1H2024
The first half of 2024 saw a significant milestone in Singapore’s property market, as the total value of auction properties listed for sale crossed $1 billion. This figure is based on the 211 properties tracked by SRI’s auction team, of which 139 were owners’ sales and 72 were mortgagee sales. The total also includes properties that were previously withdrawn from auction due to a lack of buyers, but have since resurfaced at other auctions.
According to Mok Sze Sze, managing partner of auctions and sales at SRI, this billion-dollar milestone marks a 49.5% increase in value compared to the same period last year. In 1H2023, the total value of auction properties listed for sale was $669 million across 166 listings. This jump in value can be attributed to two main factors: a spike in the number of properties being put up for auction and an increase in the average opening prices of these properties.
Auctions have been gaining popularity in recent years, with the number of auction listings seeing a 27.1% year-on-year increase from 166 listings in 1H2023 to 211 listings in 1H2024. According to Alison Lee, head of auction and sales at ERA Singapore, this is because of the transparent nature of auctions. In the case of multiple bids, the competition can drive up prices, reflecting the property’s maximum value under the current market conditions.
The sale of a 1,248 sq ft, three-bedroom unit at Dover Parkview at Dover Rise is a prime example of how auctions can drive up prices. The condo’s management corporation strata title board (MCST) put it up for sale at Knight Frank’s auction in May with an opening price of $1.7 million. Knight Frank eventually received seven bids from three parties before it was sold for $1.82 million ($1,458 psf).
The high interest rate environment and tougher market conditions have led to a spike in mortgagee sales at auctions. SRI’s data shows that the number of mortgagee sale listings rose 30.9% year-on-year to 72 in 1H2024 from 55 in 1H2023. The most significant spike in mortgagee sales occurred in 2Q2024, which saw a 88% quarter-on-quarter increase from 25 listings in 1Q2024.
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On the other hand, the number of owners’ auction listings increased at a more moderate pace of 25.2% year-on-year to 139 in 1H2024 from 111 in 1H2023. Recent transactions at Dover Parkview tabulated by EP Buddy. (Source: EdgeProp Singapore, URA)
The trend of increasing mortgagee sales is also reflected in the rise in average opening prices at auctions over the past 18 months. In 1H2024, the average opening price for the 211 properties put up for auction was $4.74 million, a 17.6% surge compared to the average price of $4.03 million for 166 properties listed in 1H2023. Furthermore, mortgagee sale listings saw a faster increase in average guide prices compared to owners’ sales. The average guide price for a property listed for mortgagee sale in 1H2024 was $2.85 million, up 20.25% from $2.37 million in 1H2023, while the average guide price for an owner’s sale was $5.72 million, up 17.7% from $4.86 million in 1H2023.
The higher average quantum price for mortgagee sales could be due to the growing number of higher-value properties being listed at auctions. Notably, the three largest auctions by absolute price involved mortgagee sales of freehold properties. For instance, a 3,261 sq ft freehold maisonette at Villa Delle Rose off Holland Road was sold for $5.4 million ($1,656 psf) at Knight Frank’s auction in January.
However, despite the increase in properties being sold at auctions, most properties are still sold via private treaty, after their initial debut at auctions. According to Joy Tan, head of auction and sales at Edmund Tie, her team managed to sell one property at auction and three others through private treaty, amounting to $4.5 million from January to June this year. She believes that more owners who purchased residential property during the pandemic are likely to choose auction as the mode of asset disposal. This could be due to the high interest rate environment and future competition as the government continues to ramp up supply through the government land sales programme.
Edmund Tie’s Tan believes that the number of mortgagee listings this year could come in line with the 105 listings seen last year. However, she expects owners’ sales to continue to outnumber mortgagee listings this year. In contrast, SRI’s Mok and ERA’s Lee expect the number of mortgagee sales in 2H2024 to surpass the level in 1H2024, as the unemployment rate increases and interest rates remain high.