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News Release

Singapore

Quicker sales at auctions in 4Q 2014

More properties sold upon first listing


​​SINGAPORE, 23 December 2014 – 4Q14 saw quicker sales at auctions, largely attributable to a smaller mismatch between the price expectations of sellers and buyers.

Based on JLL's data, the proportion (by sales value) of properties sold upon their first listing for auction has been increasing over the past three quarters. This proportion reached 90 per cent in 4Q14, considerably higher than the 80 per cent and 54 per cent recorded in 3Q14 and 2Q14, respectively (refer to Chart 1).

The higher pace of sales in 2014 is attributable to the compromises on both the purchasers' end and the vendors' end, leading to the convergence in price expectations. Sellers are now more willing to lower price expectations in light of the weaker market conditions, whereas from the buyers' perspective, the anticipation of a potential relaxation of cooling measures alongside the expected rise of interest rates in the immediate horizon could have encouraged these purchases.

In 4Q14 to date, the total value of successfully auctioned properties stands at S$13.7 million, denoting a 251 percent y-o-y rise or 57 per cent q-o-q drop. The q-o-q dip in sales value was mainly due to the large base of transaction quanta in 3Q14, attributable to two big ticket items sold, which accounted for almost half the 3Q14 total sales.​

On an annual basis, S$72.5 million worth of assets were sold during auctions, some 27 per cent lower than the total sales of S$99.6 million clocked in the preceding year. JLL remains the market leader, contributing S$24.2 million or one-third of total market sales value in 2014 (refer to Chart 2).

Once again, residential took the lead in successfully hammered properties, accounting for 72 per cent of total sales value in 4Q14. This is due to the largest share of sales listings – almost two-thirds – coming from the residential sector. Moreover, the proportion of residential sales listings put up by mortgagees saw a big leap in 2014. For instance, mortgagees put up a quarterly average of 6 per cent of the residential auction sales listings in 2013. This proportion jumped to 19 per cent in 1Q14 and stood at 46 per cent in 4Q14, giving a 39 per cent average quarterly residential sales listing put up by mortgagees in 2014.

Once again, residential took the lead in successfully hammered properties, accounting for 72 per cent of total sales value in 4Q14. This is due to the largest share of sales listings – almost two-thirds – coming from the residential sector. Moreover, the proportion of residential sales listings put up by mortgagees saw a big leap in 2014. For instance, mortgagees put up a quarterly average of 6 per cent of the residential auction sales listings in 2013. This proportion jumped to 19 per cent in 1Q14 and stood at 46 per cent in 4Q14, giving a 39 per cent average quarterly residential sales listing put up by mortgagees in 2014.

Ms Mok Sze Sze, Head of Auction and Sales, JLL, commented: "The success rate at auctions showed an uptick, partially due to the steady increase in mortgagee sales in recent quarters. We noticed that the softer leasing market has not deterred buyers' investment sentiments. Last year, 21 properties were sold, with 12 or 57 per cent sold on a vacant possession basis. This year, the percentage of sales on a vacant possession basis has increased to 81 per cent. This shows that purchasers have taken the downside risks into account and that the potential gain from the investment outweighs the risks."

She added: "In 2015, the auction market is likely to see more sales listings put up by mortgagees, with a moderate increase from the 150 mortgagee listings witnessed in 2014. Again, the bulk of the listings will be non-landed residential properties in the prime sub-markets and landed homes from the suburban sub-market. The pace of sales in auctions is anticipated to be similar to 2014, as property prices are projected to slightly decline in general while the market fundaments will likely hold strong."

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