Huge interest, few sales

Two recent auctions see only one sale as buyers await further price falls

By Linette Lai

This double-storey terrace house in Upper Serangoon Road was auctioned off for $820,000, despite an appeal for opening bids of $880,000. -- PHOTO: JOSEPH NAIR FOR THE STRAITS TIMES

FEW people are buying at property auctions with most holding back in anticipation of further price falls, according to Singapore auctioneers.

Interest in the auctions held by DTZ and Jones Lang LaSalle recently was high, with people spilling out of the doors - but actual buys were thin on the ground.

Of the 23 properties up for grabs, most were withdrawn without any bids placed on them. Only one successful sale was made.

This was a double-storey terrace house in Upper Serangoon Road with a land area of 1,760sqft. The successful bidder, who refused to be interviewed, clinched it at $820,000, despite the auctioneer trying to kick off the bidding at $880,000.

Among the few properties that attracted bids, most received only one or two conservative offers. Even for the properties that proved more popular, all the bids were well below the reserve price.

Genuine buyers were said to form an estimated 60 per cent to 70per cent of the turnout at both auctions, but most of them were hoping to net a sale at bargain basement prices. Agents and gawkers made up the rest.

Ms Grace Ng, deputy managing director and auctioneer with Colliers International, said: 'Buyers are afraid to commit now in case prices haven't yet bottomed.'

Ms Mok Sze Sze, head of auctions and sales at Jones Lang LaSalle, said: 'The difference between the opening price and the counter-offer is very big - bidders are slashing 25 per cent or even 50per cent off the original prices. This is reflective of the market in general.'

Buyers and sellers are currently in a stand-off situation, with sellers refusing to offer deep discounts and buyers expecting such discounts to be forthcoming at some stage in the future.

The stand-off was reflected in the auction of a 7,610sqft industrial building in Paya Lebar. The opening price was $2.38 million, but the highest offer came up to only $1.8 million. The property was withdrawn from sale.

http://www.straitstimes.com/Breaking+News/...ory_347813.html

Wah, that is really a good bargain.

Owner must be desperate or it's mortgagee auction. Otherwise, property auctions, contrary to how people typically understand the meaning of "auction", are merely a quick way for property owners to sell their property instead of advertising in the newspapers. That's the reason why there are more withdrawals than actual sales during the auctions.

Edited March 10, 200917 yr by Milgram

Owner must be desperate or it's mortgagee auction. Otherwise, property auctions, contrary to how people typically understand the meaning of "auction", are merely a quick way for property owners to sell their property instead of advertising in the newspapers. That's the reason why there are more withdrawals than actual sales during the auctions.

I agree. This particular house I think is a bank auction.

I agree. This particular house I think is a bank auction.

I just checked - it's confirmed...this IS a mortgagee auction....999 years, 1133 Upper Serangoon Road.

I just checked - it's confirmed...this IS a mortgagee auction....999 years, 1133 Upper Serangoon Road.

Wah ... that buyer will laugh to the bank in 5-10 years (provided he don't take a loan for this)

These are the sentiments now. Nobody is going to pay for what sellers are asking for nowadays without at least 20% slash. Sellers are not being realistic and hoping to get the price they dream of.

To be fair, at this point people who sells are desperate. No one in the right mind would be selling when the market is so bad. So its not that the sellers are unrealistic, but they are probably just desperate to recover their losses.

I am more interested in this news:

"The stand-off was reflected in the auction of a 7,610sqft industrial building in Paya Lebar. The opening price was $2.38 million, but the highest offer came up to only $1.8 million. The property was withdrawn from sale."

Paya Lebar's industrial rent averages about $1.80psf for those with reasonable infrastructure/location, I don't think anyone is renting below $1.50psf unless its a d*mn lousy space.

$1.50psf x 7,610sqft = $11K+ rental income per month.

Say if the property can sell for $2mil, 90% loan will come up to about $7K+ monthly installments.

$11K - $8K = a cool $4K+ revenue per month, not considering other costs.

And what happens if you sell when market goes up when the economy is good?? Wow... its a rich men's playground now, indeed...

To be fair, at this point people who sells are desperate. No one in the right mind would be selling when the market is so bad. So its not that the sellers are unrealistic, but they are probably just desperate to recover their losses.

I am more interested in this news:

"The stand-off was reflected in the auction of a 7,610sqft industrial building in Paya Lebar. The opening price was $2.38 million, but the highest offer came up to only $1.8 million. The property was withdrawn from sale."

Paya Lebar's industrial rent averages about $1.80psf for those with reasonable infrastructure/location, I don't think anyone is renting below $1.50psf unless its a d*mn lousy space.

$1.50psf x 7,610sqft = $11K+ rental income per month.

Say if the property can sell for $2mil, 90% loan will come up to about $7K+ monthly installments.

$11K - $8K = a cool $4K+ revenue per month, not considering other costs.

And what happens if you sell when market goes up when the economy is good?? Wow... its a rich men's playground now, indeed...

Sign... rich men playground indeed.....

To be fair, at this point people who sells are desperate. No one in the right mind would be selling when the market is so bad. So its not that the sellers are unrealistic, but they are probably just desperate to recover their losses.

I am more interested in this news:

"The stand-off was reflected in the auction of a 7,610sqft industrial building in Paya Lebar. The opening price was $2.38 million, but the highest offer came up to only $1.8 million. The property was withdrawn from sale."

Paya Lebar's industrial rent averages about $1.80psf for those with reasonable infrastructure/location, I don't think anyone is renting below $1.50psf unless its a d*mn lousy space.

$1.50psf x 7,610sqft = $11K+ rental income per month.

Say if the property can sell for $2mil, 90% loan will come up to about $7K+ monthly installments.

$11K - $8K = a cool $4K+ revenue per month, not considering other costs.

And what happens if you sell when market goes up when the economy is good?? Wow... its a rich men's playground now, indeed...

Pretty neat analysis

Err still based on theory leh, would only work if you can rent out the place at market rate, these days industrial properties are oversupply, if any business man can do this analysis, why don't he buy the property himself.

i would not jump to that conclusion that fast. The land size, being intermediate and also the house condition is something you need to take into consideration on $$ of appreciation.

This house if i am not mistaken must be in the range of 20-30 years old. Imagine staying or leasing this out.. the amount of $$ needed to do repairs and missing all the luxury of the condo/hdb eg. hot water, aircon, cable etc.

Wah ... that buyer will laugh to the bank in 5-10 years (provided he don't take a loan for this)

i would not jump to that conclusion that fast. The land size, being intermediate and also the house condition is something you need to take into consideration on $$ of appreciation.

This house if i am not mistaken must be in the range of 20-30 years old. Imagine staying or leasing this out.. the amount of $$ needed to do repairs and missing all the luxury of the condo/hdb eg. hot water, aircon, cable etc.

Since when landed home got no hot water and a/c? Cable is not a problem just ask SCV to install. Also HDB hit record $744K now. So buyer of landed will still have the last laugh.

more than you can count using both your hand and feet . You will be surprise by the statistics.

Since when landed home got no hot water and a/c? Cable is not a problem just ask SCV to install. Also HDB hit record $744K now. So buyer of landed will still have the last laugh.