Ignoring taboo associated with Hungry Ghost Festival, buyers push up sale value to 3-year high
This year's Hungry Ghost Festival has ended well for some sellers as more buyers ignored the taboo associated with making a property purchase during the Hungry Ghost Festival.
A report by consultancy Colliers International showed that 14 properties worth $25.92 million were auctioned off during the festival which ran from Aug20 to last Friday. This is the highest sale value recorded in three years, it said.
The figure beats the $9.56 million worth of sales during the festival in 2007, when sellers were still asking for the moon while buyers were starting to be wary of high prices because of the US sub-prime crisis.
In 2006, when there was a double Hungry Ghost month due to a quirk in the lunar calendar, $133.9 million worth of properties were sold at auctions. The market was then running up and a Sentosa Cove auction held during the period - which fetched $86.34 million for a dozen bungalow plots - helped to push sales up.
During the Hungry Ghost Festival, which falls on the seventh month in the lunar calendar, superstitious buyers refrain from making big commitments. These include getting married, buying a property or moving house.
Still, practicality sometimes overrides superstition as buyers find it hard to resist a good deal, experts said.
'It was only during the past two to three years that it became obvious that people are becoming less superstitious,' said Knight Frank auctioneer Mary Sai. 'This year, we have seen people coming back to the auction market since April as they felt that the new launches were beyond their reach. And the momentum has kept up through the seventh month.'
During this year's Hungry Ghost Festival, 85 properties were put up for auction sale, of which 66 were by property owners. The remaining 19 properties were mortgagee sales - the lowest figure in 12 years, said Colliers.
The third quarter saw 57 repossessed properties put up for sale by banks, compared to 76 in the first half, but the rise may not continue in the fourth quarter which is traditionally quieter, said Ms Sai.
Colliers' deputy managing director (agency and business services) Grace Ng said owners in default are finding it easier to sell in the open market. Also, banks and financial institutions are managing their non-performing loans by giving owners the chance to dispose of their properties within a specified time.
Ms Ng said the strong response this year showed sellers were more influenced by market conditions than cultural taboos, although some still prefer to hold back.
Businesswoman Irene Teo is one of those. She will be putting three properties up for auction later this week. 'I am not superstitious but the pool of buyers out there may be,' she said.
She hopes to get at least $3.75 million for her 2,540 sq ft unit in Leonie Gardens near Orchard Road. 'If I sell by auction, I feel that I can attract more people, especially investors, at one time,' she said.
Ms Ng said sellers are the ones who are keener to wait for the Hungry Ghost month to end. 'The buyers usually don't mind,' she said.
14 properties worth $25.92m were auctioned off during the festival which ran from Aug 20 to last Friday;
85 properties were put up for auction sale; 66 of them were by property owners; 19 properties were mortgagee sales.
Source: Sunday Times, 20 Sep 2009