MORE real estate owners are turning to the auction market as a method of sale, according to Knight Frank’s market update on Wednesday (Oct 26). 

Owner sale listings almost doubled to 91 listings in Q3 2022, up 46.3 per cent from the previous quarter’s 62. This is a 7.1 per cent increase from the 85 listings in the same period last year. It also comprised more than two thirds of the sale listings this quarter, which totalled at 131.

The growth in owner sale listings was seen in almost all property segments: Residential listings rose from 22 in Q2 to 30 in Q3, while industrial listings hiked from 13 to 20. Retail and shophouse listings also expanded this quarter, from 19 to 31 and one to six, respectively. 

This includes a 99-year leasehold two-storey detached house located along Pasir Ris Avenue, which was sold at S$3.6 million – around 20.8 per cent higher than its opening price of about S$3 million. 

A B1 ramp-up factory in Ark @ Gambas was also sold at S$785,000, at a 20.8 per cent premium to the opening price of S$650,000. 

Another notable sale includes a liquidator sale of a remnant land situated along Balestier Road, which was zoned for mixed commercial and residential development. The land parcel was sold by the real estate consultancy at S$1.1 million, 200 per cent above the opening price of S$380,000. 

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Knight Frank said the land parcel, which is adjacent to the freehold condominium Gifford Mansion, drew “heated bids” from investors hoping to combine both plots. 

“In the post-pandemic era, private property owners are increasingly becoming aware of the practical benefits of an auction with its public reach,” added the real estate consultancy. 

“Not only is there a possibility for unexpected interest at an auction translating to higher bids, successful sales among private owners outside the auction are also common once these properties have been made public because of the process.” 

Meanwhile, mortgage sale listings dived 44 per cent quarter on quarter to 28 listings. Of which, six mortgagee properties were sold during auctions in Q3 2022. 

Knight Frank highlighted that this decline was observed across all property segments, with the office sector falling the most, from seven listings to two. Listings for residential and industrial properties tumbled by 41.4 per cent and 44.4 per cent quarter on quarter to 17 and five, respectively. 

This is also in part due to the “encouraging” conversion rate at auctions, it said. 

Even with the decline in mortgage sale listings, Knight Frank noted that overall auction listings – including repeat listings and excluding properties sold outside of auction – saw a 11 per cent quarter-on-quarter increase to 131 listings in Q3. 

This was mainly driven by an increase in retail and shophouse listings, it said. Retail listings rose 45.8 per cent quarter on quarter to 35 listings, while shophouse listings soared by around six times to seven listings in Q3, from the sole listing in the previous quarter. 

Success rates of these listings remained positive in Q3 at about 6.9 per cent, with the gross sales value standing at about S$18.9 million, down 37.4 per cent from the previous quarter and 6.7 per cent year on year. 

Going forward, the real estate consultancy predicts that the success rate will surpass the original 5 per cent they had projected at the start of the year. 

“In addition, as property prices in most sectors remain on the rise, there is less urgency for most banks to commence foreclosure proceedings,” it said.