Auction market slumps 59.7% in 1H2023, lowest sales value in three years: Edmund Tie
Cognisant of the upcoming new nonpublic residential projects readied to reach the marketplace over the following few quarters, prospective buyers are keeping back on their investments, claims Tan, including that outside factors including worries of an approaching economic crisis also higher interest rates are also affecting sales.
” Furthermore, on the back of the high interest rates, the cooling actions announced in April and also the overall unpredictable macro surrounding, customers have typically adopted a wait-and-see position,” states Tan.
The “high-value deal” was for a three-storey semi-detached residence on Vaughan Road that was settled for $6.3 million. Furthermore, 7 of the outstanding properties sold at sell-off were industrial properties, with the rest being 3 homes along with a workplace property.
She includes that within the past couple of months, investors are showing a growing acceptance towards leasehold real estates with much shorter remaining lease tenures of typically 30 to 60 years. “This is likely due to investors’ higher risk resistance, as financial markets stay volatile, as well as an obvious choice change to alternative financial investment chances.”
According to Joy Tan, head of sell-off and sales at Edmund Tie, the small sales value in 1H2023 was due to “the properties pounded being of reduced quantum, mainly either beneath or just past the S$ 1 million mark. There was a single high-value deal that was above S$ 5 million”.
Looking in advance, she expects to see mortgage listings pick up merely in 2024, given the moment lag in between banks repossessing residential properties and placing them up for auction. She as well expects commercial listings to amass more purchasing interest. “Considered that business deals will not sustain extra buyer’s stamp obligation and with the increase in household offices in Singapore, well-priced office listings will certainly also likely be extremely sought after,” she says.
The local real property auction sale market effectively offered 11 estates over the initial six months of this year. A research study note posted by Edmund Tie specifies that the complete transaction price for the effectively auctioned real properties was $15.2 million.
This was the most affordable sales price recorded by the auction market since 1H2020, the beginning of the Covid-19 pandemic, when only one estate was yielded $0.94 million. It is also a substantial drop of 59.7% contrasted to 2H2022 which reported 17 sales worth $37.7 million.