Auction listings fall 25% q-o-q in 3Q2024, with fewer mortgagee sales: Knight Frank
The auction market saw a slower quarter in 3Q2024, based on data compiled by Knight Frank Singapore. A total of 86 auction listings (including repeat listings and excluding properties sold outside of auction) were recorded last quarter, representing a 25.2% decline q-o-q compared to the 115 listings logged the previous quarter.
Mortgagee sales accounted for 40 listings, marginally lower than the 42 mortgagee sale listings recorded in 2Q2024. “Distressed sales on the auction platform appear to be few despite the current economic cost pressures,” observes Sharon Lee, Knight Frank Singapore’s head of auction and sales.
Owner sale listings clocked in at 41, dropping 40.5% lower than 69 listings the quarter before. Meanwhile, the remaining five auction listings were for other types of sales, namely three industrial units listed as Management Corporation Strata Title (MCST) sales, an estate sale listing of a non-landed residential unit, and a trustee sale listing of a shophouse.
Read also: Auction listings ballooned in value to $1 bil in 1H2024 as average prices continued to rise
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Lee highlights that there have been four MCST sale listings recorded in the first nine months of 2024, compared to none last year. The MCST listings comprise one for a non-landed residence in 2Q2024 and the three industrial units listed last quarter. The properties were potentially listed for sale due to having owners who were uncontactable or were involved in a dispute, Lee adds.
In terms of property type, residential properties made up 44 (51.2%) of total listings, declining from the 73 residential listings in 2Q2024. Commercial properties made up 16 (18.6%) listings, consisting of 14 retail units and two office units, up from 12 retail shops and one office listed in 2Q2024. Industrial properties made up 23 (26.7%) listings, down from 27 listings in 2Q2024.
Out of the 86 auction listings in 3Q2024, five properties were successfully knocked down for a total of $6 million, translating to a success rate of 5.8%.
Two of the properties sold were the industrial MCST sale units. The freehold properties, both at Mactech Building on Kallang Pudding Road, fetched $1.78 million and $2.68 million, representing a premium of 20% and 34% from their opening prices of $1.48 million and $2 million respectively. MCST sales are usually priced lower compared to mortgagee and owner listings, presenting an appealing opportunity for buyers, Lee says.
Meanwhile, the three other properties sold comprise the owner sale of a 60-year leasehold industrial unit at Gordon Warehouse Building on Kaki Bukit Road for $330,000 and two mortgagee sale listings.
This brings the number of properties knocked down at auction for the first nine months of the year to 13 with a total transaction value of $26.4 million. This works out to a success rate of 4.5%.
Read also: Fewer mortgagee sale listings in 1Q2024, but owner sale listings up 48% y-o-y
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Of the 40 mortgagee sale listings in 3Q2024, residential properties accounted for 19 listings (down from 24 in 2Q2024), with all the properties being non-landed homes. Retail shops made up nine listings, up from five the previous quarter, while industrial units made up 12 listings, unchanged from the previous quarter.
For owner sales, residential properties totalled 24 listings (down from 47 in 2Q2024), comprising 10 landed homes and 14 non-landed units.“The decrease in residential owner listings could be attributed to some homeowners trying to hold out until the impact of the interest rate cuts materialises in the home loan market, in hopes that there will be more buyer interest in their property when the financing environment becomes more benign,” Lee observes.
Retail shops accounted for five owner sale listings, down from seven the previous quarter. There were also two office units, up from zero in 2Q2024. Industrial properties made up eight listings, lower than 15 in 2Q2024. The eight listings comprised of five freehold industrial units and three 60-year leasehold factories.
Despite the lower mortgagee listings in 3Q2024, Lee believes bank sales may increase in the next few quarters before they start coming down again.
On the flip side, bright spots in the economic environment – including a reduction in interest rates and the better-than-expected 4.1% growth in Singapore’s economy in 3Q2024 based on advance estimates – could potentially boost owner listings.“Hopefully, a turn in fortunes is around the corner where investors and owners can offload underperforming assets and reinvest the freed-up capital in new opportunities in the year ahead,” Lee says.
Knight Frank is predicting the auction market will log a success rate of just under 6% for the whole year, which is at the lower end of the 5% to 7% range it originally projected at the start of the year.
Read also: Owner sale listings jump 84.6% y-o-y in first two months of 2024, opening prices more than doubled
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Mortgagee sales accounted for 40 listings, marginally lower than the 42 mortgagee sale listings recorded in 2Q2024. “Distressed sales on the auction platform appear to be few despite the current economic cost pressures,” observes Sharon Lee, Knight Frank Singapore’s head of auction and sales.
Owner sale listings clocked in at 41, dropping 40.5% lower than 69 listings the quarter before. Meanwhile, the remaining five auction listings were for other types of sales, namely three industrial units listed as Management Corporation Strata Title (MCST) sales, an estate sale listing of a non-landed residential unit, and a trustee sale listing of a shophouse.
Read also: Auction listings ballooned in value to $1 bil in 1H2024 as average prices continued to rise
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Lee highlights that there have been four MCST sale listings recorded in the first nine months of 2024, compared to none last year. The MCST listings comprise one for a non-landed residence in 2Q2024 and the three industrial units listed last quarter. The properties were potentially listed for sale due to having owners who were uncontactable or were involved in a dispute, Lee adds.
In terms of property type, residential properties made up 44 (51.2%) of total listings, declining from the 73 residential listings in 2Q2024. Commercial properties made up 16 (18.6%) listings, consisting of 14 retail units and two office units, up from 12 retail shops and one office listed in 2Q2024. Industrial properties made up 23 (26.7%) listings, down from 27 listings in 2Q2024.
Out of the 86 auction listings in 3Q2024, five properties were successfully knocked down for a total of $6 million, translating to a success rate of 5.8%.
Two of the properties sold were the industrial MCST sale units. The freehold properties, both at Mactech Building on Kallang Pudding Road, fetched $1.78 million and $2.68 million, representing a premium of 20% and 34% from their opening prices of $1.48 million and $2 million respectively. MCST sales are usually priced lower compared to mortgagee and owner listings, presenting an appealing opportunity for buyers, Lee says.
Meanwhile, the three other properties sold comprise the owner sale of a 60-year leasehold industrial unit at Gordon Warehouse Building on Kaki Bukit Road for $330,000 and two mortgagee sale listings.
This brings the number of properties knocked down at auction for the first nine months of the year to 13 with a total transaction value of $26.4 million. This works out to a success rate of 4.5%.
Read also: Fewer mortgagee sale listings in 1Q2024, but owner sale listings up 48% y-o-y
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Of the 40 mortgagee sale listings in 3Q2024, residential properties accounted for 19 listings (down from 24 in 2Q2024), with all the properties being non-landed homes. Retail shops made up nine listings, up from five the previous quarter, while industrial units made up 12 listings, unchanged from the previous quarter.
For owner sales, residential properties totalled 24 listings (down from 47 in 2Q2024), comprising 10 landed homes and 14 non-landed units.“The decrease in residential owner listings could be attributed to some homeowners trying to hold out until the impact of the interest rate cuts materialises in the home loan market, in hopes that there will be more buyer interest in their property when the financing environment becomes more benign,” Lee observes.
Retail shops accounted for five owner sale listings, down from seven the previous quarter. There were also two office units, up from zero in 2Q2024. Industrial properties made up eight listings, lower than 15 in 2Q2024. The eight listings comprised of five freehold industrial units and three 60-year leasehold factories.
Despite the lower mortgagee listings in 3Q2024, Lee believes bank sales may increase in the next few quarters before they start coming down again.
On the flip side, bright spots in the economic environment – including a reduction in interest rates and the better-than-expected 4.1% growth in Singapore’s economy in 3Q2024 based on advance estimates – could potentially boost owner listings.“Hopefully, a turn in fortunes is around the corner where investors and owners can offload underperforming assets and reinvest the freed-up capital in new opportunities in the year ahead,” Lee says.
Knight Frank is predicting the auction market will log a success rate of just under 6% for the whole year, which is at the lower end of the 5% to 7% range it originally projected at the start of the year.
Read also: Owner sale listings jump 84.6% y-o-y in first two months of 2024, opening prices more than doubled
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