Fresh mortgagee sale listings hit record high in Q2

The number of fresh mortgagee sale listings in Singapore hit a record high in the second quarter amid a lacklustre leasing market.

Property consultancy Knight Frank said in a report that 31 fresh listings under mortgagee sale were made in the April to June period. Of these, 21 were residential units and six industrial properties. The other four were offices, shops and shophouses.

In a mortgagee sale, a property is put up for auction by a bank after the owner defaults on servicing the mortgage.

Data compiled by Knight Frank shows only four out of 61 units were sold, making for a success rate of just 6.6 per cent for mortgagee sales - taking into account repeat listings - lower than the 10 per cent in the first quarter.

The four sold were a 19th-floor apartment at Silversea in Marine Parade for $3.9 million; a third- storey unit at Turquoise in Sentosa Cove for $2.92 million; a 23rd- storey unit at One Amber in Marina Parade for $3.7 million; and an industrial unit at Entrepreneur Business Centre for $1.58 million.

Still, sales values in the second quarter climbed 105.9 per cent over the previous quarter to $12.1 million for mortgagee sales.

The firm expects mortgagee listings to remain elevated. "In light of heightened market volatility, freshly listed properties put up for auction under mortgagee sale look set to remain above the 50-unit mark for the second half of 2016," it said in the report.

A further 124 properties were put up for auction - mostly owner's sales. This brought the total number of properties put up for auction in the second quarter to 185, including repeat listings, a jump of 31.2 per cent over the first quarter and up by 0.5 per cent from the year before.

All in, seven out of the 185 went under the hammer in the second quarter, for a total sales value of $14.81 million - up by 48.4 per cent from the previous year.

The other three properties that were sold during the quarter were two apartments at Pine Grove for $938,000 and $1.05 million, as well as a unit at Rio Casa in Hougang Avenue 7 for $730,000.

The first half of 2016 saw $24.43 million of sales closed at auctions - down 46.7 per cent from a year earlier. Knight Frank said the fall could be due to more properties being sold before or after auction via private negotiations. It added that "the residential and shops & shophouses sectors are likely to continue forming the bulk of the properties put up for auction in the remaining months of 2016".

A version of this article appeared in the print edition of The Straits Times on August 03, 2016, with the headline 'Fresh mortgagee sale listings hit record high in Q2'. Print Edition | Subscribe