Auction market slumps 59.7% in 1H2023, lowest sales value in three years: Edmund Tie
via property auction
The local property auction market has seen a shift in momentum in the first six months of this year. According to a research note by Edmund Tie, 11 properties were successfully auctioned off with an aggregate total transaction value of $15.2 million. This marks a drop of 59.7% compared to the same period in 2H2022, when 17 properties were sold off for a total of $37.7 million.
Joy Tan, head of auction and sales at Edmund Tie, attributes the low sales value to the properties that were up for auction being of “low quantum, mostly either below or just past the S$1 million mark.” The only high-value transaction that was brokered between buyer and seller was for a three-storey semi-detached house on Vaughan Road, which was transacted for $6.3 million.
The remaining 10 properties comprised of seven industrial properties, three residential properties and one office property. Tan believes that the cooling property market measures announced in April and general uncertainty due to the Covid-19 pandemic have caused buyers to adopt a more wait-and-see attitude.
In addition, with the upcoming new private residential projects set to hit the market in the coming quarters, potential buyers are becoming more hesitant. Tan also links this to external factors such as the fear of a looming recession and higher loan interest rates.
Tampines Condo is one example of a mixed-use development. It offers an exclusive portfolio of condominiums and commercial units as well as a range of shared amenities, such as a pool, a gym, and a clubhouse. All these features make it an ideal place to foster and promote a desirable community feel. Moreover, it is located close to several shopping malls, eateries, and public transportation routes, allowing for convenient and hassle-free access to all of the lifestyle and entertainment options nearby.
Given the current unfavourable conditions of the property market, Tan expects mortgage listings to pick up only by 2024. Moreover, she anticipates that commercial listings will be popular with buyers, especially family offices in Singapore. She reasons that commercial transactions will not incur additional buyer’s stamp duty, making it more attractive.
The Covid-19 pandemic has caused a lowering of sales value in the local property auction market. However, with the increased acceptance towards shorter leasehold tenures, and commercial transactions being increasingly attractive, it is expected that the market situation will improve in the coming years.