Auctioneer’s gavel going digital as auction events remain barred

Timothy Tay
·7-min read

SINGAPORE (EDGEPROP) - Real estate agencies have not been able to hold in-person property auction events since April this year. Most physical events like auctions were cancelled during the “circuit breaker” period, which started on April 7.

While the primary and resale market segments have gradually resumed some sales and marketing activities over the past two months, auction events remain off the table for now.

ERA Realty Network and PropNex Realty — the two largest real estate agencies by number of agents — have introduced alternative ways to conduct their auction activities.

On Sept 28, ERA was the first property agency here to host a fully virtual auction that allowed registered buyers to remotely bid for properties in real time. Over 50 participants attended the 40-minute live event over video conferencing platform Zoom.

Meanwhile, PropNex held its second closed bidding exercise on Sept 22. This alternative method of sale was initially utilised two months ago.

Virtual action

ERA Realty Network CEO Jack Chua says the virtual property auction is “designed to provide convenience and peace of mind for buyers, sellers and agents, especially during the current situation. It also enables us to meet the rising needs of our tech-savvy clients who are now ready to make their property purchases online”.

Eight properties were up for sale during the virtual auction, including five residential properties, two commercial units and an industrial unit. Of these, four residential properties and a commercial unit were mortgagee sales.

One of the mortgagee sale properties was a 2½-storey, semi-detached house on Toh Tuck Road. The freehold property is within a three-storey mixed landed housing estate, and sits on a 3,340 sq ft plot. It had a guide price of $3.5 million, which translates to $1,048 psf on the land area.


The 2½-storey house on Toh Tuck Road was sold for $3.4 million ($1,018 psf) at ERA’s first virtual auction on Sept 28. (Picture: ERA)

The property was eventually sold for $3.4 million ($1,018 psf) at the virtual auction. Bidding began at $3 million and four groups of buyers cast a total of 15 bids.

Based on its current dilapidated state, the new owner would likely purchase the house with the intention of rebuilding it into a brand-new home.

“It is a promising start to the property auction community as we bring together agents and potential buyers; as well as industry players who were exploring to bring their auction online. The number of individuals registered for the virtual auction also doubled as compared to physical auctions held previously. With this benchmark set, we look forward to spearheading more innovative initiatives to boost the real estate market,” says Chua.

Another mortgagee property is a two-storey detached house on Tamarind Road, which was put on sale with a guide price of $7.4 million. This property was previously on the market for $8.8 million in March this year in a mortgagee sale and was available through private treaty.


This detached house on Tamarind Road, which sits on a 9,599 sq ft plot, was put up for auction with a guide price of $7.4 million or $842 psf on the land area. (Picture: ERA)

The freehold property is in a two-storey, mixed-landed housing estate off Yio Chu Kang Road. It sits on a spacious, 9,599 sq ft plot and the guide price translates to $842 psf on the land area. The seven-bedroom house also features a swimming pool, a basketball court, and a ground level compound with parking space for 10 cars.

Other mortgagee sale units are a three-bedroom unit at 111 Emerald Hill along Emerald Hill Road; a three-bedroom unit at Riz Haven in Jalan Loyang Besar; and a new office unit at Vision Exchange, which is located in Jurong East.

Global economic climate

“With the global economic climate and dark hiring outlook brought about by the pandemic, we do foresee many will face financial difficulty and they might opt to have more cash on hand by mortgaging out their properties, leading to a potential rise in residential mortgage property listings,” Chua notes.

He adds that the next few months could see more commercial and industrial units going under the hammer as well. “With some businesses filing for bankruptcy due to effects of the US-Sino trade war and the low global demand caused by the ongoing Covid-19 pandemic, we foresee an increase in the number of mortgagee sales properties in the coming months. Some businesses may opt to sell their properties to secure additional funding for cash flow continuity.”

Separately, PropNex’s closed bidding exercises enable private treaty deals to be accepted more than a week before a set closing date. But if a bid has been submitted, no private treaty is allowed and all offers must go through the bidding box. Thus, the seller may choose the best offer via private treaty or can stick to the closing date to determine the sales outcome.

According to a PropNex spokesperson, the auction team “received responses and numerous enquiries and bids” for the prime, freehold corner four-storey conservation shophouse building at 240 Tanjong Katong Road. However, nothing was transacted (under closed bidding exercise) for the month of August.


PropNex was marketing this conservation shophouse on Tanjong Katong Road in its closed bidding exercise in August. (Picture: PropNex)

The closed bidding exercise in September saw eight properties go up for sale, comprising four private residential properties, two five-room HDB flats, a conservation shophouse at 240 Tanjong Katong Road and an industrial unit.

PropNex says the Tanjong Katong Road shophouse was sold via closed bidding on Sept 22 but declined to disclose the selling price. They have also received bids for the other properties as well.

PropNex’s head of research and content Wong Siew Ying says that the absence of physical auction activities since April this year means it would not be meaningful to assess the performance of the auction market this year. The bottoming out of the auction market “would very much depend on whether physical auctions are allowed to resume, even as the government slowly eases measures regarding the number of persons at events”, she adds.

Success rate

Compared to past crisis periods — like SARS in 2002 and the global financial crisis (GFC) of 2007-2008 — the auction market during this Covid-19 pandemic has recorded more mortgagee sales during the period. The success rate is also higher.

Commenting on the performance of the ERA auction team so far this year, Chua says: “Even though we closed fewer units compared to last year, the total sales price transacted increased by 30% [compared to a year ago]. These transactions were done through private treaty deals.”

He says that the pandemic situation has accelerated the digital transformation of the real estate industry, and has shown that “people are more willing to accept the idea of purchasing properties online”. Chua adds that all the sellers were open to the concept of a virtual auction by ERA, which is notable given the proportion of mortgagee sale listings put up.

“We are planning to organise the virtual auction on a regular basis until the physical auction is allowed, and we will review the effectiveness of both formats. Since the start of the Covid-19 circuit breaker, the usual face-to-face property auction has been suspended. However, the demand for property auction services is still present from both property owners and financial institutions,” he concludes.

Check out the latest listings near: 240 Tanjong Katong Road, Jurong East, 111 Emerald Hill

For price trends, recent transactions, other project info, check out these projects' research page: Toh Tuck Road,Tamarind Road, Yio Chu Kang Road, Emerald Hill Road, Riz Haven, Jalan Loyang Besar

See Also:



  • Up next
  • Up next
  • Up next
  • Up next

Latest stories