“Going once, going twice, sold!” This is a phrase commonly heard at property auctions in Singapore, which have – over the years – gained favour with both sellers and buyers.

Auction houses, such as Colliers International, DTZ, Jones Lang LaSalle and Knight Frank, typically conduct auctions on a monthly basis in a hotel. About 200 people on average show up at each session, comprising both local and foreign buyers.

The stigma of auctions associated with properties that have been repossessed by banks has slowly eroded over the years, as witnessed by the decreasing number of such properties surfacing at auctions versus the increasing number put up by property owners.

In 1H 2010, mortgagee sales accounted for a mere 14 per cent of the total number of properties being put up for auction. The rest were sales by owners. This is a stark contrast to the 50-50 split between mortagagee and owner sales seen in 1998.

The paradigm shift to using auctions as a mode of sale in Singapore has become more prevalent today, with both sellers and buyers acknowledging that the auction process is transparent and more efficient.

In fact, property auctions are also increasingly gaining favour with developers and foreign buyers.

During the property boom years in 2006 and 2007, developers – including Sentosa Cove and Tuan Sing Holdings – successfully sold their land parcels and new residential units to an international audience via auction sales.

Not only did these developers achieve record prices, they also gained great exposure for their projects and garnered high participation from foreign purchasers hailing from Australia, Hong Kong, India, Indonesia and Malaysia.

Property Auctions Increase The Probability Of Sale

The increasing trend of property owners opting for auctions as the mode of sale can be attributed to a number of reasons.

Typically, sellers have three sale opportunity windows: 1) Before the scheduled auction date, if the price meets the seller’s expectations; 2) On the auction day; and 3) After the auction date, through private treaty negotiations.

Before a scheduled auction, auction houses would market the properties to the contacts in their database. This is accompanied by an intensive two-to-three-week advertising campaign to reach out to prospective buyers. Hence, property owners can be assured that the reach to prospective buyers is maximised.

The fixed auction date will encourage genuine buyers to do their due diligence in researching the property and work out their financing without procrastination, so that they can reach a decision by the date of auction.

Competitive bidding at the auction also enables the seller to obtain the best price for his property.

If the bid price meets the minimum reserve price set by the seller, a confirmed sale then takes place on-site with the knockdown of the hammer, followed by a down-payment (usually five per cent of the sale price for residential properties) and the signing of the sale and purchase agreement.

Hence, the probability of a sale through auction is higher. Given the trend that more vendors are using auctions as a method to sell their properties, auctions will continue to gain popularity in Singapore.

Popular Property Types Seen at Auctions

Mass market apartments that are well located in established areas – including Bedok, Changi, Jurong, Serangoon, Telok Kurau and West Coast, among others – are generally very popular with upgraders.

Buyers are attracted to older properties in the secondary market due to their large floor area, compared to new developments which are much smaller in size.

Some properties successfully auctioned off in the first half of the year included apartments in Chiltern Park (Serangoon), Changi Green (Changi) and The Warren (Choa Chu Kang), which were sold at $1.015 million, $918,000 and $830,000, respectively.

Landed properties are in demand due to their limited supply in land-scarce Singapore. Houses located in the Bukit Timah vicinity, such as Watten Estate and Hillcrest, are the most sought after due to their proximity to reputable schools and the Circle Line. Four semi-detached houses at Hillcrest Road and two at Watten Estate were sold for between $3.32 million and $3.53 million each.

What Are Popular In 2010?

Properties with en bloc potential

With the collective sale market showing a recovery, older properties with en bloc potential are once again back on buyers’ radar.

Apartments in Windsor (Upper Thomson Road) and Greenlodge (Toh Tuck Road) were sold for between $1.08 million and $1.28 million earlier this year.

High-end properties

High-end properties are making a comeback, propelled by the return of foreign buyers and the opening of the two Integrated Resorts (IRs).

Five high-end apartments worth a total of $13.38 million were sold at auctions in the first half of the year. They included a unit at Oceanfront (Sentosa Cove), which was sold for $3.15 million.

The most expensive luxurious apartment sold by far this year was an apartment in D’Grove Villas, which was knocked down at $5.42 million.

High-end properties in developments that have the potential to be put up for en bloc sale, such as Claymore Plaza Apartment (Claymore Hill), D’Grove Villas (Orange Grove Road) and The Beaumont (Devonshire Road), were sold at auctions this year.

Popular Property Types To Watch For In The Near Future

Inner city apartments

Investors are turning their attention to apartments such as The Sail (Marina Bay), and Icon (Tanjong Pagar) – especially those in the region of $1 million to $1.5 million.

Their close proximity to the two new IRs and downtown area as well as ease of access to other parts of Singapore have made them highly rentable and they generate attractive yields.

New properties which are nearing completion or have obtained Temporary Occupation Permit (TOP)

Such properties appeal to both owner occupiers and investors due to their near-term rental generation ability, as well as near-term owner-occupation opportunity.

The writer is deputy managing director (Agency and Business Services) and Auctioneer at Colliers International.

Source: Today, 6 Aug 2010

Auction sales in Singapore grew for the first half this year, totalling about $87 million. Property consultant Jones Lang LaSalle’s Auction House reported more than 80 per cent of all listings were put up for sale by owners.

The increase in the number of properties for sale by auction is due to a change in mindset – many now see it as an effective mode of sale, the firm said.

Auction attendances have also increased on-quarter, with June seeing attendance rates of more than 120 punters.

Jones Lang LaSalle expects the third quarter to see maintained levels of owner-sale listings as people return from holiday.

Source: Today, 6 Jul 2010

The Singapore property auction market rose 20 per cent on-year in the first half of this year to S$87 million, according to property consultants Colliers International.

A total of 440 properties were put up for auction, of which 378 properties were from property owners while only 62 were mortgagee sales.

Colliers said the sharp fall in the number of properties put up for mortgage sale is a reflection of the vastly-improved financial position of mortgagors.

April saw the highest value from auctions when 12 properties changed hands at a total value of more than S$24.4 million.

The lull period was in May, when only two properties were sold for S$6.89 million. This could be due to concerns over European debts, as well as the tension between North and South Korea which sent jitters through the stock market, said Colliers.

It added that buying interest at auctions will also remain keen as liquidity in the market is high and more investors are looking to real estate to hedge against inflation.

The sale of seven landed properties contributed 23.1 per cent or S$20.08 million to auction transactions during the six-month period.

Four out of the seven landed properties are located in the Bukit Timah vicinity.

Other types of properties sold in auctions are retail properties, which contributed S$20.07 million or 23.1 per cent to total sales; as well as high-end apartments which contributed S$13.38 million or 15.4 per cent.

Source: Channel News Asia, 30 Jun 2010

This exceeds any quarter of 2009, says Colliers Int’l

More high-end homes surfaced at auctions in the first quarter of this year, mostly involving owner sales, the latest figures from Colliers International show.

About $13.4 million of such properties changed hands at auctions in Q1, higher than any quarter of last year.

The total value of all properties sold at auctions in the first three months of this year, meanwhile, surged to $45.3 million. This is an increase of about 16 per cent from the preceding quarter and 2.5 times the $17.94 million in Q1 last year.

Upmarket homes have been drawing bids not just from Singaporeans but also foreigners such as Malaysians and Indonesians, says Grace Ng, deputy managing director (agency and business services) and auctioneer at Colliers.

She defines high-end residential properties as prestigious and good-quality developments in prime locations. Ms Ng also said high-end homes located near the integrated resorts and apartments in the central business district (CBD) and around Tanjong Pagar were well sought after in Q1.

‘The strong market response seen for new projects such as 76 Shenton has spilled over to other residential developments in the vicinity such as Icon, One Shenton, as well as apartments in older developments like International Plaza,’ Ms Ng reckons.

Residential properties made up 51 per cent of auction sales in the first three months of the year.

Jones Lang LaSalle head of auctions Mok Sze Sze has also observed an increase in demand for both commercial and industrial properties at her firm’s auctions in Q1. She attributes this to office rents starting to stabilise and people looking to take advantage of higher rental returns attributed to commercial property.

Owner sales continued to dominate auctions. Colliers figures show that nearly 83 per cent of the total 160 properties put on the auction block in Q1 2010 were offered by their owners. The number of mortgagee properties put up for auction remained low in view of continued economic recovery and improvement in the job market.

Ms Ng says that compared with the same period last year, auctions in Q1 this year were marked by more positive market sentiment and a stronger appetite for property investment, with healthy participation on the auction floor and interest even from foreign bidders for high-end properties.

‘In Q1 2009, when the property market was still reeling from the effects of the financial crisis, auction rooms were packed but buyers were looking for bargains. So bidding levels and activity were low and there was a big price gap between sellers and buyers,’ she recalls.

The total value of properties sold at auction rose from about $15.8 million in January and $9.1 million in February this year to nearly $20.4 million in March.

‘There is general interest from Singaporeans to park their money in properties due to high liquidity and paltry returns on bank deposits,’ says Ms Ng.

Owner sales will continue to dominate auctions, say auctioneers.

However, owners are jacking up prices following the price increases achieved by developers. ‘In some cases, owners are asking around 20 per cent above valuation,’ according to Ms Ng.

Shaun Poh, DTZ senior director of auction & investment advisory services, says the buyer-seller price gap for auction properties has widened from about 5-10 per cent in Q3 last year to 10-15 per cent currently. ‘This is the single biggest challenge for the auction market.’

Enquiries for residential properties put up for auction have quietened down significantly in the past few weeks as buyers have been drawn to property launches.

‘Financing packages are also more attractive for new properties at launches than for completed ones, so it’s easier on the wallet to buy a home from a developer than through an auction,’ Mr Poh notes.

Source: Business Times, 9 Apr 2010

The market is likely to chalk up more than $200 million worth of transactions this year, says GRACE NG

IT was a stellar year for auctions last year despite the unfavourable market conditions. About $168.4 million worth of properties were sold at auctions in 2009, doubling the $83.67 million done in 2008.

The residential sector was the star performer, chalking up $88.4 million worth of transactions, or slightly over half the total sales value. The retail sector was the next best performer, with $43.4 million worth of sales.

Strong interest was seen for shops and shophouses, as investors chose to park their money in higher yielding investments rather than keep it in the bank for paltry interest rates. The sector that saw the highest growth rate was industrial property. Sales value jumped 223 per cent, from $6.2 million in 2008 to $20 million last year.

Buoyant market pushes up sales

Mirroring the buoyant sales in the primary residential market, residential properties at auctions saw a 250 per cent jump in sales value in 2009. The figure soared from $25.2 million in 2008 to $88.4 million last year.

More residential buyers are turning their attention to auction sales because the properties available at auctions are deemed to be better value for money as most of the older properties tend to have much larger land or built-up areas.

In addition, buyers who are owner-occupiers can move into the property when the sale is completed, which is typically three months after the payment of deposit. In comparison, purchasing from a developer could mean a wait of about two years before the property is ready for occupation.

Popular picks in 2009

# Landed properties: Terrace and semi-detached. In our land-scarce country, owning a landed property remains the aspiration of many Singaporeans. It is also a status symbol, as these properties are only available to Singaporeans and permanent residents with approval from the Land Dealings (Approval) Unit.

Even though landed properties do not come with facilities like those found in cluster housing or condominiums, they remain popular, as such properties usually have a private garden and car porch and do not have maintenance charges. Thus, it is not surprising that landed houses have become popular at auctions.

In 2009, terrace houses costing around $1 million and below were in demand because of their affordability. Five terraces were sold at prices ranging from $820,000 to $1.25 million.

Corner terraces and semi-detached houses, especially those that sit on large land areas, were the favourites, as these properties are rarely available. A total of 11 semi-detached houses were sold during the year at prices ranging from $1.05 million to $3.7 million. The majority of the transactions were below $2 million and the properties had land areas ranging from 2,400 sq ft to 4,414 sq ft.

Buyers also favoured semi-detached houses with large land areas. Nine of the 11 semi-detached houses sold at last year’s auctions had land areas in excess of 3,500 sq ft.

The popularity of this type of property can be attributed to the fact that newer semi-detached houses have smaller land areas of about 2,150 sq ft, which could translate to a higher price per sq ft.

# Apartments with large floor areas: With developers building smaller apartments – some of them dubbed Mickey Mouse flats – in their new developments, the older and larger apartments have become a popular alternative at auctions with owner-occupiers as well as upgraders.

Apartments in the secondary market are generally larger with a 2-bedroom unit averaging 800 sq ft, a 3-bedroom 1,250 sq ft and a 4-bedroom unit 1,800 sq ft. In comparison, new apartments today are much smaller starting from 300 sq ft for a studio, 527 sq ft for a 2-bedder and 861 sq ft for a 3-bedder.

Given the limited number of large apartments in the primary market, many throng the auction halls in search of their ideal apartments. Apartments ranging from 1,000 sq ft to 1,299 sq ft were popular at auctions. Eighteen out of the 42 units sold last year fell within this category.

The apartments bought were at various locations. At International Plaza at Tanjong Pagar, a 1,033 sq ft 2-bedroom apartment was sold at auction for $800,000. At Shanghai One in River Valley, an 883 sq ft 2-bedroom unit went for $1.08 million and in Oxford Road, a 1,097 sq ft 2-bedroom apartment in Kentish Green was sold for $620,000.

# Properties below $1million: Apartments and condominiums below $1 million were popular too, as evidenced by the 27 successful transactions seen in this category out of the 42 made available at auctions.

# Apartments in prime districts: The other property type that was sought after at auctions in 2009 was high-end apartments. Apartments located in the prime inner city and District 10 under mortgagee sales were in demand. Two apartments at The Clift were sold for $605,000 and $1.047 million. Another two apartments at Four Seasons Park were sold for about $4.8 million each.

What will be popular in 2010?

In line with the recovery in the high-end sector, homes in districts 9, 10, 11, as well as prime inner city and Sentosa, will continue to be popular at auctions. We can expect to see an increase in sales of homes in these areas this year. The proportion of apartment sales is likely to rise to 35 per cent compared with 29 per cent achieved last year.

The opening of the two integrated resorts (IRs) will enhance Singapore’s reputation as a world-class city. Residential properties located near the two IRs were given a boost in value as a result, and were in demand as buyers aimed to cash in on the market.

Apartments such as The Sail and Marina Bay Suites, as well as properties in Sentosa Cove, will be sought after by investors and owner-occupiers alike.

Prices of high-end homes in the Core Central Region are still about 11 per cent below their Q1 2008 peak. Improving market sentiment in line with the recovery in the economy, ample liquidity and a low interest rate environment, as well as a hunger for alternative investment opportunities, are factors pointing to a recovery.

As such, we are likely to continue to see owners taking the auction route this year to sell their high-end properties in hopes of achieving the best price through competitive bidding.

We could also see some developers exploring auctions as a mode of sale for their properties if the high-end market picks up steam.

Some developers had success when they used an auction to sell their high-end properties. For instance, 12 parcels of bungalow land in Sentosa Cove were successfully auctioned off in 2006 for a total value of $86.34 million.

And in 2007, another developer successfully auctioned 12 luxury apartments at The Botanika for $52.92 million, which set new benchmark prices for the area.

The competitive bidding helped these developers achieve record prices for their developments, and they also gained international exposure as the auctions were beamed live via satellite to cities such as Hong Kong, Jakarta, London and Sydney to tap foreign buyers.

With an improved economy, the number of properties sold at auctions this year should rise to more than 140, from the 118 seen in 2009.

More activity is expected in the high-end residential sector and this is likely to boost the sales value at auctions. As such, the market is likely to chalk up more than $200 million worth of transactions this year.

Grace Ng is deputy managing director (agency & business services) and auctioneer, Colliers International

Source: Business Times, 25 Mar 2010

Next year, there will be even fewer mortgagee sales at auctions as the economy continues to improve. Yet more owners are expected to go the auction route when it comes to selling their properties.

Jones Lang LaSalle said it expects to see more owners choosing to do so in the year ahead.

It also believes the number of mortgagee sales – or forced sales of repossessed properties – will fall further as the economy continues to improve.

Colliers International noted that more owners have taken to using auctions as a mode of sale due to its convenience.

This method has a relatively structured marketing process, a fixed sale date as well as a pre-arranged viewing schedule, it said.

‘Additionally, owners would be able to achieve good prices as a result of competitive bidding at auctions, especially if the market is buoyant.’

The bet is on a stronger property market next year. This means that mortgagee sales may not be done at very low prices.

‘A mortgagee sale does not necessarily mean a cheap sale,’ said Knight Frank auctioneer Mary Sai.

‘Next year’s mortgagee sales will be done at the prevailing market rate then, and prices may have inched up a few more per cent from this year’s level,’ she said.

Colliers expects high-end prices to recover next year as Singapore steps out of the global recession and opens its two integrated resorts. The sale of more high-value properties will prop up the total sale value at auctions next year, it said.

Mass market prices have recovered, while high-end prices are still a distance from the boom levels of early last year.

Nevertheless, buyers may still be able to find what they want at an auction.

As apartments get smaller and smaller these days, Colliers International is predicting that large homes will increase in popularity at next year’s auctions.

Residential properties that are perceived to be ‘value for money’, such as landed homes with big land areas or large apartments, would continue to be favoured by buyers, said its deputy managing director (agency and business services) and auctioneer Grace Ng.

But these need to be at bargain prices as terrace houses or small bungalow plots are typically popular with owner-occupiers.

The commercial sector, experts said, may present some good buys.

Colliers said that given ample liquidity in the market, shops and shophouse units with attractive rental returns will remain highly sought after.

Said Ms Sai: ‘Strata shops and offices are something to look out for. If rentals have declined, prices will likely fall in tandem.’

In the past, buyers wanted a gross rental yield of 6per cent to 8 per cent for a commercial property, she said.

‘Now that the cost of borrowing has fallen, some short-term buyers may want to buy a commercial property that gives a smaller yield of 4per cent to 5 per cent,’ she added.

Indeed, said Ms Ng, tenanted shop and shophouse units with average yields of about 5 per cent have attracted investors at auctions this year, given that bank interest rates are at a low of less than 1per cent.

In comparison, the average residential yield is about 3per cent to 3.5 per cent.

Landed homes typically offer an even lower yield of 1.5per cent to 2 per cent, though the potential for capital appreciation may be greater, experts said.

Source: Sunday Times, 27 Dec 2009

Number of mortgagee properties put up for auction falls 25%

THE property auction scene is expected to continue sparkling next year, spurred by interest in the high-end residential market, says Colliers International. It says that the total value of properties sold at auctions may exceed $200 million in 2010, after the figure doubled this year to about $168.4 million from last year’s $83.7 million.

A total of 118 properties were sold at auctions in 2009, again up from last year’s 72.

The residential property was the star performer, accounting for about 52 per cent of total auction sales value.

Contrary to earlier expectations in some quarters, the number of mortgagee properties put on the auction block fell 25 per cent to 195. The figure includes other forced sales, for instance, by the Inland Revenue Authority of Singapore and management corporations.

‘The low number of mortgagee sales could be due to the introduction of the government’s Jobs Credit scheme, which stabilised the employment market. This, in turn, provided some home owners with the ability to service their monthly mortgage loans,’ says Grace Ng, Colliers deputy managing director (agency and business services) and auctioneer.

The number of properties put up for auction by their owners (including trustee sales) rose 10 per cent to 732, further testament to growing acceptance of auctions as a mode of selling property.

Mok Sze Sze, Jones Lang LaSalle head of auctions, says: ‘Owners are attracted by the competitive nature of the auction environment and the high chance of attaining an optimum price for their property.’

She expects to see more owners putting their properties on the auction block next year and, as the economy continues to improve, a further decrease in the number of mortgagee sales.

Colliers highlighted a more than 200 per cent jump in the sales value of residential and industrial properties sold at auction this year to $88.4 million and $20 million respectively. Older residential properties with large areas were popular for both landed and non-landed segments.

The sales value of retail properties transacted at auction rose from $34.6 million last year to $43.4 million.

This year’s auction tally of $168.4 million is about 59 per cent below the peak figures $409.46 million in 1999 and $407.43 million set in 2007.

Back in 1999, when the private residential property market staged a spectacular recovery after the Asian crisis, 27 per cent of 1,210 properties that went under the hammer were sold at auctions, according to Colliers’ analysis. This year, the 118 properties sold made up just 13 per cent of the total 927 properties put on the auction block.

Colliers’ definition of total number of properties put up for auction includes those withdrawn before auction or sold before/after the auction. However, the number sold refers only to those transacted at auction.

Source: Business Times, 18 Dec 2009

Separate Colliers auction sees 2 shop units, 2 houses and 1 apartment sold

(SINGAPORE) The owners of eight freehold strata-titled commercial units and vacant site at Thomson Village, off Upper Thomson Road, have joined forces to sell their properties through a tender. The properties have a combined site area of 13,387 sq ft and an asking price of $24 million.

Under Master Plan 2008, the site is zoned for commercial use. ‘The plot ratio is not indicated but the site is under a streetblock plan, which means the potential developer will have to follow an envelope control guideline for the area set by Urban Redevelopment Authority. The properties could be redeveloped into a low-rise specialty retail mall,’ said Galven Tan, assistant manager (investment properties) at CB Richard Ellis, which is marketing the site.

‘Depending on the design of a new development, a 2.8 plot ratio could be achieved,’ according to Mr Tan. Plot ratio is the ratio of maximum gross floor area to land area. Assuming this plot ratio, an estimated development charge (DC) of $5 million would be payable to the state. The $24 million price works out to $774 psf per plot ratio inclusive of DC.

The owners of the strata commercial units and the vacant site have signed a collective sale agreement, which means the sale will not be subject to an application to the Strata Titles Board. The tender closes on Nov 25.

There is adjoining state land of about 6,400 sq ft that could potentially be purchased by the successful bidder, CBRE says.

Separately, at an auction conducted by Colliers International yesterday, five properties were sold – an apartment at The Horizon at Holt Road; two freehold landed houses at Jalan Taman and Lowland Road, both off Upper Serangoon Road; and a shop unit each at Sim Lim Square and Golden Landmark.

The ground floor unit at Sim Lim Square, which involved a liquidator sale, was sold to a private investor for $3.75 million, reflecting $6,970 psf based on the unit’s 538 sq ft strata area. The unit faces the main concourse. Last week, Second Chance Properties picked up 22 shop units at Sim Lim Square for $35 million or an average price of $3,644 psf based on their total area of 9,604 sq ft.

Over at Golden Landmark, near Bugis MRT Station, a 355 sq ft corner shop on the third floor with double frontage changed hands at $365,000 or $1,028 psf.

The third-floor freehold apartment at The Horizon was sold for $1.8 million or $1,154 psf. The two-storey intermediate terrace house at Jalan Taman was sold for $1.25 million or $630 psf of land area.

At 74 Lowland Road, which is next to a temple, the three-storey semi-detached house with six bedrooms was sold for $1.72 million or $636 psf of land area. The buyer is understood to be a former Chinese national who is now a Singapore citizen.

Source: Business Times, 29 Oct 2009

Property auctions are another avenue house-hunters can explore

An auction is another marketplace home buyers can check out if they want to widen their property search.

Auctioneer Mary Sai from Knight Frank said the auction method is fast, neat and transparent.

While there may not be as many mortgagee sales – when a bank sells a property it has repossessed because the borrower cannot pay his mortgage – as expected earlier, there are more owners willing to sell via auction.

If you are interested in taking this route you can start by contacting the auction houses to get an idea of the properties on offer.

The main auction houses in Singapore – Colliers International, DTZ, Jones Lang LaSalle and Knight Frank – post their auction dates, venues and available properties online. They usually hold their auctions at Amara Hotel.

Apart from the big boys, there is also CKS, a smaller but long-time player. Recently, new entrants such as Credo Real Estate have also joined the market.

Before the auction

If a property on the list catches your eye, you can arrange to view it before the auction.

Viewing the property allows potential buyers to assess the condition in which it will be sold, auctioneers say.

You should also check the conditions of sale of the property and watch out for last-minute changes.

The auction houses will value the properties and provide a price guide for buyers.

‘If it’s a mortgagee sale, banks usually provide the reserve price only at the last minute, so we will first get our valuers to give a range of prices as a guide,’ said Mr Shaun Poh, DTZ senior director for investment advisory services and auction.

Although an auction sale is conducted publicly when the property goes under the hammer, auctioneers say buyers are free to make a bid before the auction as some vendors may be keen to sell.

And before heading to the auction hall, it is important that potential buyers have a price range in mind so they know how far their bids can go, said Ms Mok Sze Sze, Jones Lang LaSalle’s head of auction & sales.

Those who require financing should make sure they consult their bankers ahead of the event, said Ms Sai.

And do not forget to take your cheque book. Should you succeed in bidding for a property, you will have to pay a 10 per cent deposit. Those buying commercial properties also have to pay the Goods and Services Tax on the spot.

During the auction

Upon entering the venue, find a seat in a conspicuous position so the auctioneer can see you and acknowledge your bids, advised Ms Sai.

Bidders should be alert and keep track of their competitors as some properties sell quickly.

They should raise their hands to bid only if they are clear on the price increment the auctioneer has asked for. Increments can range from $5,000 to $20,000 depending on the price of the property.

But if you are keen on buying a property and do not want to pay too much, there is no harm trying for a smaller increment of $1,000, said Ms Mok.

The auctioneer may invite bids from the floor, and that is when bidders can call out a price increment.

Bidders can even make a counter offer, particularly at the start, auctioneers say.

On the other hand, if they are very keen on a property, they can consider a ‘jump bid’ – a bid higher than what the auctioneer is calling for – to outbid competitors.

Assuming the price has reached $800,000 and the auctioneer is calling for $820,000, the buyer can choose to make a jump bid by offering $850,000.

By doing so, he has taken away his competitor’s likely bid of say, $840,000, said Ms Mok. ‘A jump bid indicates a strong interest in securing the property and is a good way to cut off competition.’

Finally, when bidding, be decisive, as you are not allowed to retract your bids.

After the auction

‘Bidding is buying,’ said Ms Sai. ‘When the auctioneer says ‘Sold’, the property is yours. You then sign the contract and pay the deposit immediately.’

There is no cooling-off period. You pay the remaining 90 per cent upon completion of the sale, usually within eight to 12 weeks.

If the property you are bidding for fails to reach the reserve price, leave your contact number as the vendor may decide to sell it later, says Mr Poh.

Source: Sunday Times, 18 Oct 2009

Ignoring taboo associated with Hungry Ghost Festival, buyers push up sale value to 3-year high

This year’s Hungry Ghost Festival has ended well for some sellers as more buyers ignored the taboo associated with making a property purchase during the Hungry Ghost Festival.

A report by consultancy Colliers International showed that 14 properties worth $25.92 million were auctioned off during the festival which ran from Aug20 to last Friday. This is the highest sale value recorded in three years, it said.

The figure beats the $9.56 million worth of sales during the festival in 2007, when sellers were still asking for the moon while buyers were starting to be wary of high prices because of the US sub-prime crisis.

In 2006, when there was a double Hungry Ghost month due to a quirk in the lunar calendar, $133.9 million worth of properties were sold at auctions. The market was then running up and a Sentosa Cove auction held during the period – which fetched $86.34 million for a dozen bungalow plots – helped to push sales up.

During the Hungry Ghost Festival, which falls on the seventh month in the lunar calendar, superstitious buyers refrain from making big commitments. These include getting married, buying a property or moving house.

Still, practicality sometimes overrides superstition as buyers find it hard to resist a good deal, experts said.

‘It was only during the past two to three years that it became obvious that people are becoming less superstitious,’ said Knight Frank auctioneer Mary Sai. ‘This year, we have seen people coming back to the auction market since April as they felt that the new launches were beyond their reach. And the momentum has kept up through the seventh month.’

During this year’s Hungry Ghost Festival, 85 properties were put up for auction sale, of which 66 were by property owners. The remaining 19 properties were mortgagee sales – the lowest figure in 12 years, said Colliers.

The third quarter saw 57 repossessed properties put up for sale by banks, compared to 76 in the first half, but the rise may not continue in the fourth quarter which is traditionally quieter, said Ms Sai.

Colliers’ deputy managing director (agency and business services) Grace Ng said owners in default are finding it easier to sell in the open market. Also, banks and financial institutions are managing their non-performing loans by giving owners the chance to dispose of their properties within a specified time.

Ms Ng said the strong response this year showed sellers were more influenced by market conditions than cultural taboos, although some still prefer to hold back.

Businesswoman Irene Teo is one of those. She will be putting three properties up for auction later this week. ‘I am not superstitious but the pool of buyers out there may be,’ she said.

She hopes to get at least $3.75 million for her 2,540 sq ft unit in Leonie Gardens near Orchard Road. ‘If I sell by auction, I feel that I can attract more people, especially investors, at one time,’ she said.

Ms Ng said sellers are the ones who are keener to wait for the Hungry Ghost month to end. ‘The buyers usually don’t mind,’ she said.

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KEY FIGURES

14 properties worth $25.92m were auctioned off during the festival which ran from Aug 20 to last Friday;

85 properties were put up for auction sale; 66 of them were by property owners; 19 properties were mortgagee sales.

Source: Sunday Times, 20 Sep 2009