Source : The Business Times, September 3, 2008
August sales of $22.75m beat June's $11.35m, the next highest this year
TYPICALLY a taboo time for property purchases, this year's Hungry Ghost Festival bucked the trend and worked up an appetite among buyers in the auction market.
The festival fell in August, which registered the highest sale value for auctions so far this year. According to Colliers International, 12 properties and sites out of 66 put up for auction were sold, fetching $22.75 million.
This surpassed the next-highest auction sale value of $11.35 million in June this year and the $9.56 million recorded during the Hungry Ghost Festival last year.
It 'confirms that buyers will defy traditional taboos and will commit to a purchase so long as the price and location - among other factors - are right,' said Colliers deputy managing director (agency and business services) and auctioneer Grace Ng.
Of the auction sale value of $22.75 million in August, 61 per cent or $13.81 million came from the sale of four residential in-fill sites at a Singapore Land Authority (SLA) auction.
If the subdued mood at the SLA auction was anything to go by however, the market has quietened from a year ago and figures indicate the same.
From January to August this year, properties sold at auctions totalled $70.79 million. Amid buoyant sentiment in the same period last year, total sale value was more than four times higher at $329.18 million.
The sluggish stock market, negative reports from the US and more conservative bank lending dragged property market activity down in the earlier part of the year, said Knight Frank executive director (auctions) Mary Sai.
Sales are taking longer to materialise in the auction market. 'We have more willing sellers with realistic pricing, but buyers are bottom-fishing,' Ms Sai said. In particular, residential property sales in the auction market have been slow, said DTZ senior director Shaun Poh.
'Some potential buyers may be waiting for more re-possessed property to come along,' he said. 'This may happen beginning next year as new developments receive their Temporary Occupation Permits and speculators from the earlier market boom lose their ability to pay the bulk of the purchase price.'
According to Colliers, commercial and industrial properties sold at auctions during the Hungry Ghost Festival this year fetched $5.42 million, exceeding the $3.52 million from residential properties.
'During market downturns, investors tend to shift their focus to non-residential properties,' said Colliers's Ms Ng. 'Commercial and industrial properties generally offer better yields than residential properties, and the limited supply has made this asset class more resilient to unattractive market conditions.'
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