Forgot your password?

Forgot your username?


 
 
 
 
Home › Articles

Property auctions on the rise

Article by RealEstateOnline posted on 2015-09-19

Uptrend: From the interest surrounding auctions, it is likely that prices of auctioned properties may be trending up.Uptrend: From the interest surrounding auctions, it is likely that prices of auctioned properties may be trending up.

 

By: THEAN LEE CHENG

AT a recent property auction, a low-rise apartment with a price tag of RM18,000 was sold to a 30-something for RM22,000. It is unlikely she is going to stay. The place looks rather rundown. “A very good buy. A mamak restaurant downstairs. Easy to rent,” says the auctioneer.

The picture of the next property is flashed on the screen, a medium cost high-rise unit. The reserve price of RM82,000 is bid up to RM136,000.

In less than an hour, the Saturday morning auction is over.

Foong Chon Wai, the chief operating officer of Ng Chan Mau auction house says the RM22,000 flat can be rented out for RM300.

In a year, that’s RM3,600. Divided by a RM22,000 investment, that’s an annual gross gain of 16%. That is better than what the bank can offer, says Foong.

“Only at auctions, can you buy properties for less than RM100,000,” he says. From the interest surrounding auctions these couple of years, it is likely that prices of auctioned properties may be trending up.

He explains: “If a house with a reserve price of RM82,000 can be sold for RM136,000, the next time such a property comes to me in that location, I will price it at RM140,000.”

The auction story underscores the popularity of auctions.

These buyers turn to auctions because prices are more manageable, says Foong.

Properties on auction generally trail the market by 15%-20%. One just needs to Google and a list of auctions in different parts of the country will pop up. A couple of banks also hold monthly auctions, which means there are more auctions today than a decade ago.

“Cheap and nice, sometimes you have people being killed there. Or it could be bad feng shui. People do not bother anymore,” says Foong.

The stigma of buying an auctioned property is slowly dissipating. Foong also expects more properties to enter this market towards the end of this year, 2016 and 2017. Divorces, unemployment, financial mismanagement are some of the reasons why properties enter the auction market.

He expects three trends to emerge. Properties purchased on developers interest bearing schemes (DIBS) will enter this market. Some of these properties were bought with down payments as low as 5%, says Foong.


This may lead to “more expensive properties” in the RM400,000-RM500,000 range unlike the predominantly low- and medium-cost properties today. Small units in that price range were sold a few years ago. If buyers are unable to get rentals that cover the monthly mortgage amount, they may have to let them go. But before this happen, there will be “tell-tale” signs like inconsistent mortgage repayment.

Foong also expects more professionals to have their properties auctioned off. He did not elaborate.

According to several valuers, they are indeed getting more bank requests to value properties that are heading towards the auction market.

Views from valuers

Property consultancy VPC Alliance (KL) Sdn Bhd managing director James Wong says the number of valuation for this market has increased by a fifth since the second quarter of this year, while the number of mortgage valuations have dropped by about 10% since the fourth quarter of last year.

“This trend is expected to continue at least until the end of the year,” says Wong. He addes that most of the properties coming under the hammer are medium- and low-cost high rise units.

Jordan Lee & Jaafar managing director P. Tangga Peragasam says he noticed the rising numbers in the first quarter of this year.

This is mainly due to a large number of investors in the property market a few years ago.

“They may not be able to pay due to various reasons and some of these properties were bought at inflated prices and may be 15km to 20km from the city. Those who can afford will not want to live so far away and they may have problems getting these units rented out,” Tangga says.

He says the trend usually begins with residential units before the commercial properties are affected. About 60% of the total properties sold are from the residential segment.

Tangga provides a simple time line and process. On defaulting, the lending institution will give the borrower three letters asking for payment. If the mortgage remains unsettled over a period of time, the bank’s lawyer is informed. The bank also assigns a valuer to value the property.

The lawyer gets a court application to sell and an auctioneer is appointed and a date fixed. The period between the loan default and the auction may be between four and six months.

Das Gupta, the principal of property consultancy Stocker Roberts & Gupta Sdn Bhd, says mortgage valuations – which is needed when buyers buy from the secondary market – is down by 35% compared to a year ago, and auction valuations requested by lending institutions are up by a fifth.

“It shows that the economy is not good. All these started from the beginning of this year,” Das says.

Source: The Star Online
email this printer friendly  

  • Eastern & Oriental sees over 3,000 people registering for Tower 1B of Tamarind project
  • Eko Titiwangsa mercu tanda baharu Kuala Lumpur
  • Liow: KL-Kuantan rail link will spur growth
  • Gabungan AQRS eyes MRT Line 2
  • KSL Holdings bangunkan pusat beli-belah RM2 bilion
  • Related Properties

    RM220,000 KUALA SELANGOR
    KG LUBOK JAYA
    Land Size: 2.5 (acre(s))
    Agricultural | For sale
    Tel: 03-42531135
    Ref No: #A1.0.0.(S)938

     

    RM80,000 KG MELAYU RASA TAMBAHAN
    Kg. Melayu Rasa Tambahan
    Land Size: 2844 (sf)
    Vacant Land > Residential | For sale
    Tel: 03-42531135
    Ref No: #VR1.0.0.(S)937

    RM430,000 TAMAN PANDAN JAYA
    Jalan Pandan 8/1, Taman Pandan Jaya
    Built-up: 900 (sf)
    Room: 3, Bathroom: 2
    Residential > Terrace | For sale
    Tel: 03-42531135
    Ref No: #RT1.0.0.(S)936

     

    RM580,000 BUKIT BANDARAYA, SEK U11/9, SHAH ALAM
    Jln Gunung Nuag U11/9, Bukit Bandaraya, Seksyen U11
    Built-up: 1800 (sf) Land Size: 20 x 70 (sf)
    Room: 4, Bathroom: 3
    Residential > Terrace | For sale
    Tel: 03-42531135
    Ref No: #RT1.0.0.(S)935

    RM650,000 SAVILLE CONDO (also known as Saville @ Melawati)
    Jalan Kolam Air Off Jalan Lingkaran Tengah 2 (MRR2), Taman Melawati
    Built-up: 1253 (sf)
    Room: 4, Bathroom: 3
    Residential > Condominium | For sale
    Tel: 03-42531135
    Ref No: #RC19.0.0.(S)934

     

    RM155,000 PANGSAPURI AU3/10
    Pangsapuri AU3/10, Taman Sri Keramat
    Built-up: 579 (sf)
    Room: 2, Bathroom: 1
    Residential > Apartment | For sale
    Tel: 03-42531135
    Ref No: #RA1.0.0.(S)933

    RM2,100,000 JOHAN SETIA, KLANG
    Batu 5, Johan Setia
    Land Size: 2 (acre(s))
    Vacant Land > Agricultural | For sale
    Tel: 03-42531135
    Ref No: #VA1.0.0.(S)932

     

    RM1,100,000 LAMAN LAVENDA, NILAI
    Laman Lavenda, Nilai Impian
    Built-up: 2100 (sf) Land Size: 9800 (sf)
    Room: 4, Bathroom: 3
    Residential > Semi-Detached | For sale
    Tel: 03-42531135
    Ref No: #RSD1.0.0.(S)931

    RM550,000 TAMAN PUTRA SULAIMAN
    Jln Putra 2, Tmn Putra Sulaiman,
    Built-up: 1100 (sf) Land Size: 1300 (sf)
    Room: 3, Bathroom: 1
    Residential > Terrace | For sale
    Tel: 03-42531135
    Ref No: #RT1.0.0.(S)930

     

    RM730,000 TAMAN PUTRA SULAIMAN
    Jln Putra 2, Tmn Putra Sulaiman,
    Built-up: 1600 (sf) Land Size: 20 x 60 (sf)
    Room: 4, Bathroom: 3
    Residential > Terrace | For sale
    Tel: 03-42531135
    Ref No: #RT1.0.0.(S)929

    RM18 psf ROYAL TOWN BANTING
    Kg Sungai Raba, Banting
    Land Size: 44.7 (acre(s))
    Vacant Land > Residential | For sale
    Tel: 03-42531135
    Ref No: #VR1.0.0.(S)928

     

    RM450,000 RESIDENSI GOMBAK 126
    359, Jalan Gombak, Taman SetapaK
    Built-up: 750 (sf)
    Room: 3, Bathroom: 2
    Residential > Condominium | For sale
    Tel: 03-42531135
    Ref No: #RC12.0.0.(S)927

    RM2,750,000 AMPANG JAYA
    Jalan 4M, Ampang Jaya
    Built-up: 2100 (sf) Land Size: 5447 (sf)
    Room: 6, Bathroom: 5
    Residential > Semi-Detached | For sale
    Tel: 03-42531135
    Ref No: #RSD1.0.0.(S)926

     

    RM3.50 psf MAYANG PLAZA BLOCK A
    No. 1, Jalan SS 26/2, Taman Mayang Jaya,
    Built-up: 51105 (sf)
    Commercial > Office Complex | For Rent
    Tel: 03-42531135
    Ref No: #COC1.0.0.(R)925

    RM5 psf BLOCK 1A, KL SENTRAL
    Block 1 A KL Sentral, Jalan Sentral 5,
    Built-up: 9084 -81714 (sf)
    Commercial > Office Complex | For Rent
    Tel: 03-42531135
    Ref No: #COC9.0.0.(R)924

     

    RM390,000 TAMAN IXORA, SALAK TINGGI
    Taman Ixora, Bandar Baru Salak Tinggi
    Built-up: 900 (sf) Land Size: 1400 (sf)
    Room: 4, Bathroom: 2
    Residential > Terrace | For sale
    Tel: 03-42531135
    Ref No: #RT1.0.0.(S)923

    RM120,000 FLAT PKNS SG. WAY FASA 2
    Jalan PJS 6/3B, Kg Lindungan, Sg. Way
    Built-up: 609.02 (sf)
    Room: 2, Bathroom: 1
    Residential > Flat | For sale
    Tel: 03-42531135
    Ref No: #RF1.0.0.(S)922

     

    RM255,000 SPRING VILLE
    Jalan UP1/1C, Taman Ukay Perdana,
    Built-up: 736 (sf)
    Room: 3, Bathroom: 2
    Residential > Condominium | For sale
    Tel: 03-42531135
    Ref No: #RC13.0.0.(S)921

    RM450,000 SAUJANA ASTER CONDOMINIUM
    Jalan P11h/1, Precinct 11, Putrajaya,
    Built-up: 875 (sf)
    Room: 3, Bathroom: 2
    Residential > Condominium | For sale
    Tel: 03-42531135
    Ref No: #RC9.0.0.(S)920

     

    RM380,000 SRI GOMBAK
    Jalan SG 8/11, Taman Sri Gombak,
    Land Size: 7481 (sf)
    Vacant Land > Residential | For sale
    Tel: 03-42531135
    Ref No: #VR1.0.0.(S)919


    Foreign Investment
    Guideline on Acquisition of Property
    Related Properties
    Related Property

    RM4,500.00
    Condominium
    LUMINA KIARA CONDOMINIUM


    RM20,000.00
    Condominium
    CINTA CONDOMINIUM


    RM3.30
    Office Complex
    BANGUNAN KWSP ( BANGUNAN KASIM CHAN)


    RM6,100.00
    Service Apartment
    BERJAYA TIMES SQUARE HOTEL


    RM70,000.00
    Flat
    SHAH ALAM


     
     
    COMPANY PROPERTIES PROPERTIES DATABASE FAQS FOR CLIENTS
    Contact Us
    Real Estate Agent
    Residential
    Commercial
    Industrial
    Agricultural
    Vacant Land
    For Sale
    For Rent
    Featured Development
    Wanted
    Finder
    Interactive Maps
    Ads With Us
    FAQs
    Support
    Log In
    Sign Up
    Term & Condition
    Promotions
    Banks

    Facebook
    Twitter

     
     
    Copyright © 2011 RealEstateOnline.com.my All Rights Reserved.