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Auction listings experienced a decrease by 3.0% q-o-q to 96 listings in the 1Q2023 According to a study conducted by Knight Frank. This is inclusive of repeat listings and does not include properties which were not sold at auction. The drop is largely due to Chinese New Year festivities when certain auctions were put off according to Sharon Lee, head of auction and sale in Knight Frank Singapore.
The number of mortgage listings for owner listings was higher than those for mortgage listings in the 1Q2023, continuing the trend that began with the 2nd quarter of 2022 Lee highlights. In a y-o-y perspective the total listing of auctions increased by 20% from the 80 listings that were available in 1Q2022.
The decrease in total listings in 1Q2023 occurred together with a moderate rate of success that was 6.3% in 1Q2023, which is equivalent to six properties that were sold. Comparatively the auction market had the highest successful rate 9.1% in 4Q2022. 9.1% in 4Q2022, where the total number of listings was 99.
Residential properties comprised 46.9% (45) of the total listings for 1Q2023. Of those 18 were mortgagee listings and 20 were owner listings. Other kinds of sales (including receiver, estate and bank transactions) comprised seven listings. In particular, a home that was not landed situated at Saint Regis Residences was advertised as a receiver sale for two months consecutively, and then was sold out of auction for $13.5 million.
Mortgagee listings jumped nearly three times more than 10 in the 4Q2022 period to 32 by 1Q2023, and an increase was that was observed across all property kinds. There were 18 mortgagee listings for residential properties nearly double the number of listings that were recorded in the prior quarter. In spite of this q-o -q growth listing of mortgages for residential properties was 14.3% lower y-o-y than the 21 listed in the 1Q2022 period.
Office and retail mortgagee listings grew by four and three in the 1Q2023, as compared to 4Q2022 where there were no commercial properties were listed. Industrial mortgagee listings increased from 2 in 4Q2022 to seven during 1Q2023. The rise could be due to the increasingly difficult business environment impacted by global economic turmoil along with widespread inflation, and the rising interest rates, according to Lee.
Of the mortgagee listings of 32 in 1Q2023 Six of them were successfully auctioned. The properties comprised small-quantum listings, with prices ranging between $350,000 and $1.12 million. The five properties were sold at a discounted price or at a close proximity to their initial price, while a property was an office space located in Paya Lebar Square which was purchased at $1.12 million. That’s 1.8% higher than the initial price at $1.1 million.
Owner listings amounted to 57 in the first quarter of 2018, a drop from the 72 listings recorded in the preceding quarter. The figure, however, is more than twice the number of listings recorded in the comparable quarter last year. It is also the fourth consecutive quarter where listing by owners outnumbered mortgagee sale listings.
Knight Frank’s Lee says the change is due to homeowners who have chosen to leverage auctions to attract more attention for their property. “Increasingly it is evident that the previous rate of success at auctions has increased the confidence of a few owners who are now taking advantage of the opportunity to sell their property with the hope of selling for a price that is more desirable either prior to or after auction due to the publicity and publicity for marketing,” she explains.
For instance the apartment with four bedrooms at Bayshore Park was initially offered by an owner to auction in October 2022. The property was sold following an the auction in February 2023, when the interest of buyers was sparked by auction channels.
There 20 owner listings for homes in 1Q2023, which was lower than 29 listings in the prior quarter, but greater than seven listings in the same period in last year’s time. Owner listings for industrial and retail were up to the respective levels of 19 and 10 listings in the 1Q2023 quarter. This is an increase from the 17 and 9 listings recorded in 4Q2022. Office owner listings fell 14.3% q-o-q to six in 1Q2023. It was fifty% higher than the four recorded in 1Q2022.
In general, given the declining business outlook and increasing costs putting pressure on operations Business owners could be struggling to keep their businesses afloat Lee says. Lee. As per the Ministry of Law, there were 959 bankruptcy cases filed between January between January and March. The figure was 5.6% higher q-o-q and 22.2% higher y-oy. Moving forward, the greater number of bankruptcy cases filed could result in a rise in mortgagee listings, specifically for office properties during the second quarter this year. Lee opines.
In the same way the increasing popularity of auctions among property owners will result in more auctions. The owners will be attracted by the potential of “serendipitous bids” for buyers who are discerning according to Lee. Knight Frank maintains the overall performance of auctions over the whole year 2023 to be between five% up to 7%.