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Hungry Ghost property auction sales value hits 3-year high

Posted on 16 Sep 2009 | Comments Off

This year’s Hungry Ghost Festival has spooked buyers in the property auction market, but enough cash was still burned up to set a three-year high in sales.

Property consultancy Colliers International said on Wednesday only 14 out of 85 properties put up for auction during the Hungry Ghost Festival, which began on August 20, were sold. That works out to a successful transaction rate of just 16.4 per cent.

Of the 85 properties put up for auction, 78 per cent were by property owners and only 22 per cent were mortgagee sales – the lowest figure in 12 years.

Colliers attributes the low number of mortgagee sales to the sanguine market as owners who are in default may now find it easier to sell their assets in the open market.

Moreover, financial institutions are managing their non-performing loans by giving owners the opportunity to dispose their properties within a defined time period.

The total auction sales value came up to S$25.92 million – the highest amount recorded in three years.

Colliers said about half of this year’s sales figure was due to the successful auction of four infill sites by the Singapore Land Authority. Continue reading →

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Posted in Property Market / Real Estate

Tagged Hungry Ghost Festival, Property Auctions, Singapore Property, Singapore Property Market

Without proper disclosure, how useful are research reports?

Posted on 16 Sep 2009 | Comments Off

IN A Monday report on the property sector issued before the government’s anti-speculation real estate measures were announced in Parliament, a foreign broker said it was positive on stocks of developers because not only was Singapore in the early stages of a residential sector upswing, but there were also no indications that the government would do anything to derail the recovery.

In the various ‘buy’ calls on Genting Singapore which were issued during the stock’s run-up over the past six weeks or so – some of which went so far as to describe the stock as potentially being worth $2 to $3 – not one drew attention to the fact that the company had yet to announce a profit. All instead relied on the promise of possible riches available from the start of casino season in Singapore next year, based mainly on forecasts from the company’s management.

When formulating its calls for various blue chips, a foreign broker employs long-term forecasting models which project cash flows or ‘value creation’ for a period of up to 10-18 years, ie, up to the year 2019- 2027. Details of the model, however, are only given deep inside the report and are, in some cases, sketchy.

There’s more, but by now a common thread should be obvious – because of the rebound in equity markets since March, rising complacency in the financial markets has led to increased exuberance in the broking community. This in itself is fine – in an upward, frenzied market, investors are typically hungry for ideas and there’s nothing like a juicy investment story with a high target price to stir the senses. Continue reading →