Bargain hunters turning to auctions for great buys
Bargains through auctions?
Yes, it's not all about outbidding someone else and paying astronomical prices for fine art, wine and luxury watches.
There are also auctions in which defunct businesses sell off a large chunk of their assets, such as old hotels that offload their old furnishings under the hammer.
That's how Hock Siong & Co, a second-hand furniture store, ended up with a statue of Sir Stamford Raffles. The historic piece, which the company bought at an auction, now stands in one of its warehouses at Kampong Ampat, off MacPherson Road.
Hock Siong often buys its stock of second-hand items from auctions and re-sells the items for a healthy profit.
The store saw a turnover of more than $3 million in 2012.
It bought items from the defunct Marco Polo and Hotel Phoenix in the 1990s and grabbed everything, including sofas, lamps and soft furnishings such as curtains, pillows and bed linen. It also bought crockery and utensils.
But such purchases are not without risks. When items are bought in a single lot, they may include lemons that cannot be sold.
The local company, which began as a karung guni (rag and bone) business more than 10 years ago, now has about 50 workers. It takes up nine units totalling 30,000 sq ft at the Kampong Ampat building.
Three of its units have become the busy hunting ground for home owners looking for good bargains.
COURT BAILIFF AUCTIONS
Bargain hunters also seek out court bailiff auctions for good buys.
It works this way: When a debtor is unable to make payment, a creditor can get a court order that allows a court bailiff to seize assets.
The sale of these assets help the creditor recover some of the money owed.
The items seized can include anything, such as audio sets and kitchen appliances.
These are sold as secondhand or pre-loved items overseas - to Nigeria and Indochina.
Such dealers can be found negotiating and doing business at Little India, along Upper Weld Road and Jalan Besar as well.
But the activities have dwindled.
The average number of auctions held by the High Court for the last three years was 19. Many of those who bid at these storage wars deal only in cash and are known only by their nicknames.
Just visit Upper Weld Road and ask for the Three Brothers, or The Angry Man, even the Two Sisters, and you will be given specific directions to their shops.
A secondhand dealer known as one half of Two Sisters says: "The Vietnamese are no longer taking in used furniture and the Nigerians are finding it challenging to come into Singapore.
"We heard they would need two guarantors to come into Singapore."
Another man, better known as The Angry Man, who deals in old electronic goods, says it is increasingly difficult to eke out a living in his niche.
"We used to buy by weight. When we picked up an amp, for example, and it was heavy, we knew we had a good thing.
"Bose, TEAC, Auralex, you know you had it made," he tells The New Paper on Sunday, speaking in Teochew.
Today, he says, they are not as lucky.
"When you take the equipment apart, it is not even worth what you have just paid. Most of the insides have been replaced with cheap 'made in China' parts," he explains.
The gems go beyond electronics.
In 2013, the District Court ordered four racehorses to be seized after the horse owners could not pay off debts owed to the stables. They were later sold through an auction.
Investors snap up big-ticket items
Aside from auctions attended by serious bargain hunters, there are also those for the well-heeled.
In Asia, auctions of modern art, rare whiskies and jewellery have been hitting new highs, with increasing numbers of rich investors hunting for posh assets to bolster their returns.
And Singaporeans have been jumping in. In 2013, a local kidney specialist, Dr Gordon Ku, netted $4.9 million from half of his fine wine collection. The Christie's auction was held in Hong Kong.
Property and car auctions are a little different. In Singapore, they sometimes signal a car or house owner who has trouble paying off his loan.
For investors, property auctions make good hunting ground.
There can be good quality homes at market rates, says Knight Frank auctions head Sharon Lee.
Last year, buyers flocked to bank sales of homes.
In 2014, the number of homes put up for sale at auctions by banks surged about seven times, compared to 2013's figure.
Mortgagee sale of these homes are due to over-committed borrowers defaulting on repayments.
"The buyers know that these sellers have a serious intention to sell," says Ms Grace Ng, deputy managing director at commercial real estate firm Colliers International.
Last year, there were 123 homes that were auctioned as mortgagee sales, which is about 77 per cent of a total of 159 forced sales listings. In 2013, there were only 17 homes listed.
The spike came on the back of a "stricter regulatory and financing environment", where borrowers in default find it harder to sell their properties on their own, Ms Ng says.
A high number of bankruptcies could also have contributed to the increase in the number of properties put up for mortgagee sale. According to the Insolvency and Public Trustee's Office, more than 1,661 bankruptcy orders were made from January to November 2014.
The four licensed real estate auctioneers in Singapore say they hold property auctions on a monthly basis, usually at Amara Hotel in Tanjong Pagar.
How are items sold at auctions?
There are two types of auctions: one for moveable properties like electrical appliances and the other for immovable properties like houses.
A Supreme Court spokesman said that if the item is valued below $2,000, details of the auction will be published in the Supreme Court website 14 days before the auction date.
A notice is also posted at the auction venue seven days before it is held. For items above $2,000, an authorised auctioneer conducts the sale.
Details of auctions for houses and apartments are published in The Straits Times and the Supreme Court website no less than 14 days before the date of the sale.
Anyone can attend the auctions except for the Supreme Court officer who handled the case. The items that go under the hammer are listed in lots. The auctioneer will auction the items lot by lot.
But the items do not simply go to the highest bidder.
Some of them, including apartments, can have reserve prices. If the reserve price is not met, it item is not sold.