More investors in large homes and small industrial units here have been overwhelmed by the struggle to service their bank loans.
The number of properties being repossessed and put up for auction this year has hit a seven-year high since 2009, said a commercial real estate services firm yesterday.
These mortgagee listings are put under the hammer by banks and other financial institutions after the borrowers defaulted. Their numbers surged by 51.6 per cent to 241 this year, from 159 last year.
More owners of residential and industrial properties also turned to the auction market to sell their properties this year. There were 555 owner listings this year, which pushed the total auction listings to 796, the highest since 2010, and a 50.5 per cent jump from the 529 total auction listings last year.
Despite the rise in the number of mortgagee listings, Ms Grace Ng, deputy managing director of Colliers International, said "there is little cause for anxiety yet".
"It is still lower than the number recorded during the Asian and global financial crises in 1998 and 2008, respectively, as well as the last market downturn in 2004," she said. "Prospective buyers have generally stayed cautious, on the back of the stringent regulatory and financing environment."
Some see opportunity, after considering the impending pipeline supply of residential units, the continued rise in benchmark interest rates and the macroeconomic uncertainties. Others have been deterred by the challenging rental market as more new residential properties are being completed.
Ms Ng expects the number of mortgagee sales to continue to rise next year, perhaps exceeding the 270 high recorded in 2008.
The 0.25 percentage point interest rate hike by the US Federal Reserve will add to the strain of borrowers in financing mortgages, she said.
"The bulk of the mortgagee listings will still be made up of large landed and non-landed homes, as well as strata-titled industrial units.
"We forecast that the total sale value for the Singapore auction market in 2016 is likely be around $80 million to $90 million - lower than the $101.62 million this year, which was boosted by the sale of high-value properties."