SALES of properties on auction here plummeted last month, in one of the first signs that the global credit crunch may be taking a toll on Singapore

SALES of properties on auction here plummeted last month, in one of the first signs that the global credit crunch may be taking a toll on Singapore’s property market.

Only $10.79 million of properties were sold under the hammer in the month, less than one-fifth of what was fetched in each of June and July, said property firm Colliers International, one of the biggest auctioneers here.

Since March, the value of properties sold via auction each month has ranged from $33 million to $108 million.

But this plunged last month, said Colliers, which released a report on auction sales yesterday.

In previous years, August has traditionally been a slow month for property sales due to the Hungry Ghost Festival.

But superstitious buyers were not the reason auction sales turned in an exceptionally poor showing in this year’s hungry ghost month, which stretched from Aug 13 to Monday.

Colliers said the nosedive in sales was mainly due to the recent stock market volatility caused by United States sub-prime mortgage worries, new government policies, and higher asking prices by sellers.

‘Given the good property market performance, many sellers have raised their expectations and upped their asking prices, especially for properties with en bloc potential,’ said Ms Grace Ng, Colliers’ auctioneer and deputy managing director.

She added that these properties have also become less appealing, thanks to the newly announced rules governing collective sales, which will make it more difficult for developments to sell en bloc.

In addition, the ’stock market turmoil amid the US sub-prime woes’ has also contributed to the ’slowdown in the market, as buyers take a cautious stand’, Ms Ng said.

Only 10 properties were sold via auction in this year’s hungry ghost month, less than one-tenth of the 131 that were put up for sale in the period.

The properties that were sold fetched $9.56 million in all - a tiny fraction of the $133.86 million achieved in last year’s double hungry ghost month and ‘one of the lowest seen in the past 10 years’, Colliers added.

Although the hungry ghost month typically sees fewer property sales due to superstitious buyers and sellers, the firm said this is unlikely to be the reason for the plunge in auction sales of property.

Indeed, the number of properties put up for auction by their owners in the period surged to 88, the highest level in at least a decade.

On the other hand, the number of repossessed properties - traditionally the main source of supply for auction sales - fell to 43, down from 239 last year and the lowest level since 1998. This was largely due to the buoyant economy and climbing property prices, said Colliers.

All this shows that auction sales in the hungry ghost month were being moved more by market conditions than superstitious beliefs, the firm added.

But Ms Ng was quick to point out that the firm is still receiving plenty of inquiries about auction properties from potential buyers.

‘The inquiries are still there, but people are thinking twice before jumping in,’ she said. ‘They may be taking a step back and reassessing the prices.’

Colliers also noted that while auction sales may have plunged in the hungry ghost month, other segments of the property market appeared to still be going strong.

For instance, the total number of homes sold in the period is ’still at a very healthy level’, although it has been falling since May, the firm said.