Property auctions hammered by curbs

PHOTO: Property auctions hammered by curbs

The auction market had a lacklustre third quarter as nervy buyers held fire in the wake of property cooling measures, home loan curbs and share market volatility.

Only three of the 117 properties that went under the hammer in the three months to Sept 30 were sold.

This is down a touch from the four sales recorded in the 119 auctions held in the second quarter.

That modest fall in sales volume was more pronounced in terms of value, with homes totalling $4.6 million selling in the third quarter, down 39 per cent from the $7.6 million racked up in the three months to June 30.

Knight Frank auction head Sharon Lee said the slew of government regulations introduced this year reined in demand at auctions as home buyers anticipated price cuts amid a weakening market.

"Dampened demand could persist in the next few quarters following the implementation of the Total Debt Servicing Ratio (TDSR) framework on June 29."

The TDSR curbs home lending by imposing tougher loan guidelines for mortgage borrowers.

Ms Grace Ng, deputy managing director of Colliers International, said home buyers also became cautious after investors rushed to sell their stocks in June. Signals from the US Federal Reserve that it could be rolling back its massive money-printing programme also hit buying sentiments. She added that buyers were diverted from the auction market to new launches as developers started lowering their prices to move units.

Separately, Colliers noted that 14 of 32 foreclosed properties up for auction this year were from the industrial segment - well up on the four units last year, pointing to a tougher operating environment for businesses.

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