Factors influencing auction outcomes: Bidder turnout, auction houses and market conditions

Abstract

This study provides new evidence on the outcomes of auctions of residential real estate, focusing on the effects of bidder turnout, pricing, market conditions and auction houses. The analysis of properties offered for sale by auction in Singapore from 1995 to 2000 shows that several variables are significant in explaining why an auction results in a sale. These variables include the state of the market, the timing of the auction (year), the number of bidders and the auction house. The findings indicate that the probability of a sale is higher for distress sales, for more homogenous properties and for those located in the central region. A sensitivity analysis is provided of how market conditions and the choice of auction house influence the probability of a sale.