- e-Lelong is a web-based platform that brings residential property auctions in Malaysia online, and aims to make the bidding process more transparent and fair.
- Started by the Kuantan Court Complex in 2017, e-Lelong will now begin to roll out across the whole of Malaysia, with even Sabah and Sarawak included in its expansion plans.
- The e-Lelong platform will operate from Kuantan and bring the auction process online, elminiating the need for bidders to show up physically in court. Other features include price-capped auto-bidding, and the use of online banking rather than traditional bank drafts.
Pretty soon, auctioning for properties (also known as lelong) in Malaysia will also become a fully digital process through a platform called e-Lelong that was first implemented in the Kuantan Court Complex in June last year.
According to Malaysia’s Chief Justice Md Raus Sharif, the e-Lelong platform was introduced with the intention to curb price manipulation and increase opportunities for the public to own fixed assets, especially residential properties.
“The system will also enhance transparency and integrity of the public auction process and ensure there is no leakage of information,” he said at last year’s launch of the platform in Kuantan.
With the system expected to slowly roll out across the whole of Malaysia, the process of bidding for properties will be fully brought online, and will do away with the traditional court auctions currently in place.
Here are a few things to know.
1. Malaysia will be one of the few countries with a court-operated property auction system.
The e-Lelong platform developed by Omesti will make Malaysia one of the few countries globally to have online property auctions conducted by the courts, and follows other countries with similar systems such China, India, and the UAE among others.
Such a move makes sense for all parties involved. In a statement given to the Sunday Star, Chief Registrar of the Federal Court Datuk Seri Latifah Mohd Tahar said that the system would help save on manpower and enhance the judicial delivery system.
And while there are plans to expand the platform to the entirety of Malaysia, e-Lelong will continue to be centralised and operate from the e-Lelong Operations Centre in Kuantan.
And there are even plans to expand the system to Sabah and Sarawak.
“Sabah and Sarawak have a separate auction system. But we are looking into the possibility of integrating their system with ours,” said Latifah.
2. The auction process will be made much easier.
As mentioned previously, bidders using the e-Lelong platform will be able to enter auctions remotely instead of showing up to court to bid, with three timeslots allocated for auctions in a day—at 9am, 11am, and 2.30pm.
This is further complemented by an optional feature which will automatically bid on behalf of the user (if he/she is unable to bid on the spot), ultimately ceasing when a user-determined price cap is reached.
Also, in contrast to the current system of manual auctions, bidders will be able to use online banking instead of having to use bank drafts.
3. Making auctions more accessible.
In an article by The Edge Markets last year, an observation was made regarding a slump in Malaysia’s auction market. It was reported that although there were more residential properties on offer for buyers, auctions were slow-moving with events growing smaller and the number of bidders dwindling.
However with the widespread implementation of e-Lelong, buyers who otherwise wouldn’t consider purchasing a home through auctions might now see a new avenue to obtain one.
For starters, many might not be aware that buying a house through an auction is considerably cheaper than trying to purchase on through standard channels like property agents or developers.
Yes, an auctioned property comes with its share of problems (tenants who refuse to vacate, necessary maintenance work, etc), but it has been noted that compared to the norm, auctioned properties can have their reserve price drop as low as 20% below market value (as so happened with an apartment in The Troika, KL, where its reserve price was valued at RM948/sqft as compared to its market valuation of RM1,272/sqft).
For many, the prospect of getting a house on the cheap side may offset the other drawbacks of owning an auctioned property; for example, forking out funds to make minor repairs to a home isn’t such a big deal when you can save tens of thousands on the price of the property.
Couple this with the features of the e-Lelong platform (price transparency, privacy, ease-of-use), and suddenly those in the market for a home might start looking to auctions to see if they can find one for a more than reasonable price.
- Check out the e-Lelong website to learn more about the platform or to check out properties up for auction.
Feature Image Credit: Omesti