By MINDY TAN
INTEREST in residential properties put up for auction saw a noticeable dip in the first quarter of 2012, to one (out of three successful auctions), from 14 (out of 23) and five (out of 17) in 2010 and 2011 respectively.
Of the three properties sold – out of 84 properties put up for auction – one was a residential property; the other two properties were a petrol station along Jalan Ahmad Ibrahim and a factory in Woodlands.
This translates to a success rate of 4 per cent, a stark contrast to the success rates of 18 per cent (23 properties sold out of 127 auctioned) and 14 per cent (17 properties sold out of 120 auctioned) in 2010 and 2011 respectively.
This could be attributed to recent global market uncertainties and buyers preferring to wait for clearer signals before making any decisions, said Mok Sze Sze, head of auctions at Jones Lang LaSalle.
‘The property buying market seems to have come off the healthier sales rate of 10 per cent last quarter, which is no surprise given the weaker overall sentiment, but there has still been strong demand for industrial and commercial properties,’ she said.
Commercial and industrial property purchases are picking up the slack in the residential market, given that these sectors offer investors greater access to funds through higher loan-to-value ratios and yields, said Jones Lang LaSalle.
‘We expect industrial and commercial properties to continue their strong showing as we see a return of primary demand from occupiers/operators in the auction market,’ said Ms Mok.
‘Auction sales of private residential properties are likely to pick up pace later on this year, as both buyers and sellers realign their expectations following a clearer market direction since the cooling measures implemented in December 2011,’ she added.
Auction sales totalled $15.89 million in the first quarter of 2012.
Source: Business Times 5 Apr 2012