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News Release

Singapore

Auctions market pulse – a peek into past trends

Stable auctions market despite a subdued level of transactions this quarter


SINGAPORE, December 27,  2011 - Fourth quarter transactions over the past 2 years have typically demonstrated subdued activity in the auctions market, with the biggest drop of 47.5 per cent observed in 4Q09.

With buyers possibly holding off major decisions till after the year end celebrations, the 4Q11 results showed similar seasonal trend with transactions remaining at 3Q11 levels. However, on an annual basis, the decline in transactions this quarter was more moderate at only 33 per cent, compared to the 40 per cent in 4Q10.
 
The higher than expected proportion of auctions sold this quarter suggests a stabilization of the auctions market. Of the 71 properties listed for auctions this quarter, a total of 7 were sold, translating to a sale rate of 10 per cent. This is an increase of 4 percentage points compared to the 6% recorded in 3Q11.  
 
Though residential continues to dominate transactions, investors are increasingly diversifying to other property sectors which offer greater access to funds through higher Loan-To-Value ratios and yields. Compared to 4Q10, the proportion of residential sales fell by approximately 15 percentage points, contributing to 43 per cent of all transactions.
 
Indications that auctions are no longer an exit strategy for distressed properties can also be observed by a dip in mortgagee listings by 83 per cent, the lowest point (2) since 1Q09.  2Q11 saw a commercial property worth SGD 6.6 million brokered by Jones Lang LaSalle Auctions, further reaffirming the draw of auctions as an option to garner above average property values.
 
Mok Sze Sze, Head of Auctions at Jones Lang LaSalle says, “The property buying market seems deep with a healthy sale rate of 10 per cent this quarter. Despite the cooling measures, residential continues to dominate auction sales. However, this trend may be subdued in 2012 as the policy takes effect, with investors possibly shifting focus to alternative property sectors in search for higher yields.”
 
 

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than USD 2.9 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with USD 45.3 billion of assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 20,800 employees operating in 77 offices in 13 countries across the region. The firm was named the Best Property Consultancy in Asia Pacific at 'The Asia Pacific Property Awards 2011 in association with Bloomberg Television'. For further information, please visit our website, www.ap.joneslanglasalle.com

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