Colliers International, Singapore

The Singapore property auction market ended the year with a record S$407.43 million worth of sales. This is the highest value achieved in eight years since Year 2000, despite a decline in the number of properties being put up for auction.  A total of 1,456 properties were put up for auction this year as compared to 2,018 properties in the previous year.    

Ms Grace Ng, Deputy Managing Director and Auctioneer of Colliers International, says, “The total transacted value of S$407.43 million achieved this year is just a shade lower than the S$409.46 million done in Year 1999 when the market was recovering from the Asian Financial Crisis.”

Ms Ng continues, “The high sale value this year is attributed to the extremely vibrant residential market in the first half of the year when sales were largely dominated by high-end residential condominiums and old apartments with en bloc potential. In addition, the sale value of shop/shophouses rose significantly during the year and healthy demand was also seen for development sites and land as a result of the booming property market.” 

A 10-year High Achieved for Owner Sale

The number of owners’ sale registered a 10-year high of 810. The value of such properties doubled to S$264.71 million this year, compared to S$129.54 million seen in the previous year.

Ms Ng says, “The number of property owners using auction as a mode of sale to dispose their properties has been doubling every year since Year 2005. This year is no exception as more property owners rode on the property boom amidst steep increase in prices by selling their properties via the auction mode in an attempt to achieve the best price for their properties.”

Continued Slide in the Number of Mortgagee Sale

Meanwhile, on the other end of the scale, the number of mortgagee-typed properties put up for auction plummeted by 55 per cent from 1,418 in Year 2006 to only 646 this year.

The number of residential mortgagee sales has been steadily decreasing since the first quarter of this year from 100 to only 37 in the last quarter.

The nosedive in the number of mortgagee sale is due to the robust property market with improved property prices, which had enabled owners to successfully sell off their properties in the open market. The high employment rate had also contributed to a lower default rate.


Sectoral Performance

Three key sectors – residential (S$202.36 million), shop/shophouse (S$78.06 million) and development site/land (S$80.12 million) – propelled the total auction sale value to soar to S$407.43 million this year.

Residential

A total of S$202.36 million worth of residential properties were transacted this year as compared to S$200.33 million in the previous year. The steep price increase in the high-end market and the bustling en bloc market had contributed significantly to the active sale seen for the residential sector in the first and second quarter of the year. The property market however turned cautious in the third quarter with the US sub-prime mortgage woes and stock market turmoil. Stricter collective sale rules, hikes in development fees and the withdrawal of the deferred payment scheme in the fourth quarter led to a more subdued and cautious mood in the auction hall. Activities declined further during the quarter as the market slows down during the festive period.

High-end apartments/condominiums

There was a tremendous increase in the sale value of non-landed residential properties in Year 2007. A total of S$109.47 million worth of properties was transacted this year as compared to a mere S$41.49 million in Year 2006.

The steep price increase in the high-end market had led to a very buoyant market, especially for prime residential apartments at sought-after locations. Prime apartments including Queensberry Lodge (off River Valley Road) and Avalon (Anderson Road) were sold for S$1.51 million and S$2.7 million, respectively in the first half of Year 2007.

The high sale value achieved was also largely contributed by the sale of 12 apartments at BOTANIKA, a high-end brand new development at Napier Road, which were sold for a total value of S$52.92 million at an international auction session.

Landed properties and properties of conservation nature

Bungalows and properties of conservation nature were highly popular due to their limited supplies in the market.

Various bungalows located at prime areas were successfully transacted during the year. Examples of such bungalows were found in Goodman Road (S$8.5 million), Holland Road (S$8.6 million), Maryland Drive (S$6.95 million), and Swiss Club Road (S$8 million).

Conservation properties that were successfully transacted at auction include those at Emerald Hill Road, Cairnhill Road, and Spottiswoode Park Road, which were sold for S$4.2 million, S$7.2 million and S$1.36 million, respectively.

Developments with en bloc potential

Many owners put up their properties with en bloc potential for sale by auction in hope of obtaining the best price through competitive bidding. 

Many of such properties were sold at record prices in the first half of the year. For instance, transactions were seen for units in Watten Estate Condominium (Shelford Road) for S$2.4 million, Riverwalk Apartments (Upper Circular Road) for S$1.65 million and Cashew Heights for $1.23 million.

Shop/Shophouses

This sector recorded a remarkable increase of 172 per cent in sale value this year. S$78.06 million worth of shop/shophouses were sold under the hammer this year as compared to only S$28.75 million in the previous year.  

The supply crunch in the office market had led investors and owner occupiers to turn to shop/shophouse units as an alternative. Shophouse units located near or within the Central Business District were in demand. For instance, shophouse units located at Stanley Street, Outram Park and North Bridge Road were sold for S$4.21 million, S$2.75 million and S$3.2 million, respectively.

Additionally, several high-value shophouse units in the HDB heartlands were transacted at record prices. For example, a shop unit at Heartland Mall (Hougang) was sold for S$8.5 million, while a HDB shophouse unit at Upper Changi Road North (Bedok) was transacted at S$7 million. Despite having a 99-year leasehold tenure, these shophouse units were much sought after due to their strategic location and in high pedestrian traffic areas like HDB town centre or near to MRT station or bus interchange. Such shop/shophouse units have the ability to command a good rental rate and achieve a high yield.

Strata-titled shop units continued to receive good response at auctions in the second half of the year. Two shop units at Sim Lim Square were transacted at S$1.24 million and S$1.2 million. Smaller shop units priced below S$500,000 were deemed attractive. For example, shop units at Grandlink Square and Excelsior Hotel were successfully transacted at S$250,000 and S$318,000, respectively.

Development Sites/Land

An impressive increase of 115 per cent was recorded for this sector this year. S$80.12 million worth of land/development sites were sold at auction this year compared to just S$37.11 million last year.

Development sites sold included a piece of land at Mountbatten Road for S$13.95 million, a good class bungalow land at Dalvey Road for S$19.03 million and another piece of land at Rosyth Road for S$4.9 million.

Additionally, the Singapore Land Authority also put up six land parcels at various locations in Eng Neo Avenue, Bedok Close and Moonbeam Walk for auction and had successfully sold them amidst exuberant bidding for a total value of S$30.64 million.

Outlook

Ms Ng concludes, “Buying activities next year are likely to focus on those sectors that have yet to experience sharp price increases. One such sector would be the mass market residential sector which is generally less speculative and such properties are bought mainly for own occupation. The auction market will continue to witness the popularity of mass market residential properties that are priced below S$1 million, as well as commercial and retail properties that give good yield.”

About Colliers International

Colliers International is a global affiliation of independently owned commercial real estate firms. The organization's 10,092 employees span the world in 267 offices in 57 countries. On a worldwide basis, Colliers manages 672,945,918 square feet, and has revenue of $US 1,620,958,349.

Contact Information

Ms Seah Li Ching
Senior Executive, Marketing and Communications
Tel: 65 6223 2323
Direct: 65 6531 8545

Ms Grace Ng
Deputy Managing Director (Agency and Business Services)
Tel: 65 6223 2323
Direct: 65 6531 8500

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