Auction listings ballooned in value to $1 bil in 1H2024 as average prices continued to rise

By Nicholas Lam

/ EdgeProp Singapore |

July 25, 2024 11:44 PM SGT

A 3,261 sq ft freehold maisonette at Villa Delle Rose fetched $5.4 million at Knight Frank's auction in January (Credit: Knight Frank)

The total value of auction properties listed for sale crossed $1 billion in 1H2024. This is based on 211 properties tracked by SRI’s auction team. Of the 211 properties listed, 139 were owners’ sales, and 72 were mortgagee sales. The figures include listings of properties withdrawn from auction after failing to find a buyer and resurfacing subsequently at other auctions.

According to Mok Sze Sze, managing partner of auctions and sales at SRI, the billion-dollar milestone marks a 49.5% increase in value y-o-y compared to the $669 million across 166 listings in 1H2023.

The jump in value can be attributed to two main factors: a spike in the number of properties being put up for auction and an increase in the average opening prices of those properties.

Auctions gaining popularity

The 211 auction listings in 1H2024 mark a 27.1% y-o-y jump from the 166 listings in 1H2023.

“Over the years, auctions have gained popularity as the preferred mode of sale,” says Alison Lee, head of auction and sales at ERA Singapore. This is because of the transparent nature of auctions, she adds. If there is more than one bid, the competition could drive up prices, which will reflect the property’s maximum value under the current market conditions, according to Lee.

A prime example is the sale via auction of a 1,248 sq ft, three-bedroom unit at Dover Parkview at Dover Rise. The condo’s management corporation strata title board (MCST) put it up for sale at Knight Frank’s auction in May with an opening price of $1.7 million. Knight Frank received seven bids from three parties before it went under the hammer for $1.82 million ($1,458 psf).

A 1,248 sq ft, three-bedroom unit at Dover Parkview saw seven bids from three parties before it went under the hammer for $1.82 million (Credit: Knight Frank)

The high interest rate environment and tougher market conditions have led to a spike in mortgagee sales at auctions. According to SRI’s data, the number of mortgagee sale listings rose 30.9% y-o-y to 72 in 1H2024 from 55 in 1H2023.

The most significant spike in mortgagee sales occurred in 2Q2024, which saw 47 listings, an 88% q-o-q increase from 25 in 1Q2024.

In comparison, owners’ auction listings increased at a more moderate pace of 25.2% y-o-y to 139 in 1H2024 from 111 in 1H2023.

Recent transactions at Dover Parkview tabulated by EP Buddy. (Source: EdgeProp Singapore, URA)

Rise in average opening prices

SRI market data also showed a rise in the average opening prices at auctions over the past 18 months. In 1H2024, the average opening price for 211 properties put up for auction was $4.74 million. Over the same six-month period in 1H2023, the average opening price for the 166 properties listed for auction was $4.03 million. Hence, y-o-y, there was a 17.6% surge in average quantum price.

When the numbers were further broken down, the average guide price of mortgagee sale listings climbed faster than owners’ sales. Based on SRI’s data, the average guide price for a property listed for mortgagee sale in 1H2024 was $2.85 million, up 20.25% from $2.37 million in 1H2023.

In contrast, the average guide price for an owner’s sale was up 17.7% to $5.72 million in 1H2024 from $4.86 million in 1H2023.

SRI’s Mok attributes the contrast to the higher-value properties debuting in auctions as mortgagee sales.

Of the eight properties sold at auctions in 1H2024, the three biggest deals by absolute price were mortgagee sales of freehold properties.

The most expensive property sold at an auction was a 3,261 sq ft freehold maisonette at Villa Delle Rose, off Holland Road in prime District 10. It fetched $5.4 million ($1,656 psf) at Knight Frank’s auction in January.

Higher-value properties are making their debut in auctions as mortgagee sales (Credit: Knight Frank)

The second-highest-priced property sold under the hammer was a 3,143 sq ft freehold warehouse unit at 178 Paya Lebar along Paya Lebar Road. Zoned for B1 light industrial use, it went for $4.08 million at Edmund Tie’s auction in May.

In third place was a 1,410 sq ft, three-bedroom unit at The Sea View condo on Amber Road in prime District 15. Knight Frank put the property up for auction in February at an opening price of $3.5 million and sold it for $3.6 million ($2,553 psf).

A 1,410 sq ft, three-bedroom unit at The Sea View condo was put up for auction in February at $3.5 million before selling for $3.6 million (Photo: Samuel Isaac Chua / EdgeProp Singapore)

Most properties sold via private treaty

However, most properties are sold via private treaty after making their debut on the auction market. ERA’s Lee observes that those sold at auction tend to be freehold properties in prime locations that are attractively priced. “These days, most of the sales are transacted outside the auction room as prospective buyers prefer to negotiate directly with the buyer through private treaty,” she concedes.

For instance, Lee points to two properties listed for auction by ERA that were sold before and after the auction.

Joy Tan, head of auction and sale at Edmund Tie, says her team sold one property at auction and three others via private treaty for $4.5 million from January to June this year.

Meanwhile, according to Mok, SRI’s auction team cleared two properties at auction and 10 properties via private treaty, totalling more than $20 million in 1H2024.

Edmund Tie’s Tan believes more owners who purchased residential property during the pandemic are likely to choose auction as the mode of asset disposal.

She attributes the increase to the twin prospects of higher interest rates when refinancing and future competition as the government ramps up supply via the government land sales programme.

Tan predicts that the number of mortgagee listings this year could come in line with the 105 mortgagee listings seen last year. She also expects owners’ sales to continue to outnumber mortgagee listings this year.

However, SRI’s Mok and ERA’s Lee adopt a different view. They expect the number of mortgagee sales in 2H2024 to surpass the level in 1H2024, as the unemployment rate creeps up and interest rates remain high.

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