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Published December 28, 2011

Property auctions market stabilising in Q4, says JLL

It achieved sales rate of 10% in Q4, with 7 sales out of 71 properties listed

By MINDY TAN


A HIGHER than expected proportion of properties sold at auctions this quarter reflects a stabilisation in the market, according to a report from property firm Jones Lang LaSalle (JLL).

The auctions market achieved a sales rate of 10 per cent in Q4 2011, with seven transactions out of the 71 properties listed, compared with the 6 per cent sales rate recorded in Q3 2011.

In Q3, a total of seven auction deals were transacted. Notably, Q3's data for both auction transactions and percentage of properties sold (as opposed to those put up for sale) clocked in their lowest levels since Q1 2009.

The fall in transactions this quarter was more moderate, registering a 33 per cent year-on-year drop, compared with a 40 per cent decline in Q4 2010.

JLL noted that Q4 transactions over the past two years have typically showed subdued activity in the auctions market.

'With buyers possibly holding off major decisions till after the year-end celebrations, the Q4 2011 results showed a similar seasonal trend, with transactions remaining at Q3 2011 levels,' JLL's report said.

Mok Sze Sze, head of auctions at Jones Lang LaSalle, said: 'The property buying market seems deep with a healthy sale rate of 10 per cent this quarter.'

'Despite the cooling measures, residential continues to dominate auction sales. However, this trend may be subdued in 2012 as the policy takes effect, with investors possibly shifting focus to alternative property sectors in search of higher yields,' added Ms Mok.

While the residential component continues to dominate transactions, investors are increasingly diversifying to other property sectors that offer greater access to funds through higher loan-to-value ratios and yields, JLL said in its report.

Compared with Q4 2010, the proportion of residential sales fell by approximately 15 percentage points, and accounted for 43 per cent of all transactions.