Figures show uplift in property market over the past few months
AUCTION sales have surged in the first half of this year, with the number of transactions dramatically higher than what was clocked up last year.
The numbers tell a story of a property market rapidly gaining in confidence, especially in recent months, according to consultancy Colliers International yesterday.
Sales in the first half reached $72.39 million. That is 61 per cent up on the $45 million recorded in the second half of last year, and 87 per cent higher than the $38.64 million racked up in the same period a year ago.
Much of the pickup happened in the second quarter, after the stock market rallied and sentiment improved. This month has seen strong sales of $24.7 million, compared with the miserable $3.6 million sales in January and $1.4 million in February.
Jones Lang LaSalle, which conducted the last auction for this month yesterday, said it sold four properties worth $11.29 million, including a $3.45 million Leonie Towers apartment.
Sales were lacklustre in the first quarter because buyers had bid very low and opportunistic prices, said Ms Grace Ng, Colliers' deputy managing director (agency and business services) and auctioneer.
The mood in auction rooms now is decidedly more upbeat, with sellers keen on repricing properties about 5 per cent to 10 per cent higher, said Knight Frank auctioneer Mary Sai.
But the increased expectations do not signal a clear price rise yet. 'Prices were lagging behind the market so the sellers were moving up to match the market,' Ms Sai said. 'Those that we sold were mostly the $800,000 to $1 million types. These are the safe buys as mass market homes aren't likely to retreat much.'
The buying mood has even carried over from mass market homes to some landed and high-end property, said Ms Ng. These include two apartments at The Clift worth $605,000 and $1.047 million.
Few mortgagee sales have occurred this year despite the weak economic climate. The 103 repossessed units on the block represented only about 23 per cent of total properties put up for auction in the first half. This compares with 28 per cent last year, 44 per cent in 2007 and 50 per cent in 1998.
The number is about half of what was put up during the Asian financial crisis in 1998.
In all, there were 54 homes sold through auction in the first half.
'The continued low number of mortgagee sales could be partly attributed to financial institutions attempting to manage their distressed asset portfolio by giving property owners the opportunity to dispose of the property of their own accord,' said Ms Ng. 'There will be less contention over the sale price, as the price is determined through a consultation process with the owner.'
Ms Ng expects to see more mortgagee sales in the second half of the year due to the general lag time of approximately six months or more.
Ms Ng also expects the buying momentum to persist in the next few months, possibly leading average monthly auction sales to surpass $30 million in some months. That could send auction sales over $160 million for the year, almost twice the $83.67 million achieved last year, she said.
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