SINGAPORE - 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 there were 31 fresh listings under mortgagee sale in the April to June period, in a report out on Tuesday (Aug 2).
Of these, 21 properties were residential units, six were industrial properties, while office and shops and shophouses segment each contributed two units.
When repeat listings were included, 61 properties were put up for mortgagee sale in the quarter.
Knight Frank noted that District 15 (Katong, Joo Chiat, Amber Road area) and District 19 (Serangoon Garden, Hougang, Punggol area) each accounted for 15 per cent or more to mortgagee listings.
A mortgagee's sale involves the unit being put up for auction by a bank after the owner defaults on servicing the home loan.
Data compiled by Knight Frank showed that only four out of the 61 units were successfully sold - translating to a success rate of 6.6 per cent for mortgagee sale, lower than the 10 per cent in the first quarter.
The four properties sold were an apartment on the 19 floor at Silversea in Marine Parade for S$3.9 million, a third-storey unit at Turquoise in Sentosa Cove for S$2.92 million, a 23rd story unit at One Amber in Marina Parade for S$3.7 million, and an industrial unit at Entrepreneur Business Centre for S$1.576 million.
Despite the low success rate, sales value in the second quarter climbed 105.9 per cent over the previous quarter to S$12.1 million, which represented 81.7 per cent of total transacted sales. The consultancy 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.
Apart from the 61 units placed under mortgagee sale, another 124 properties were also up for auction in the quarter, the majority of which are owner's sales.
This brought the total number of properties put up for auction in the second quarter to 185 units, an increase 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 185 properties went under the hammer in the second quarter, for a total sales value of S$14.81 million, which was 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 and a unit at Rio Casa.
The first half of 2016 saw S$24.43 million worth of transactions closed during auctions - down 46.7 per cent from a year ago. Knight Frank said the decline could due to more properties being sold before or after auctions.
It also noted lack of transaction in the prime residential segment during the quarter, with 21 units in the prime districts of 1, 9, 10 and 11 being up up for auction - the lowest since the second quarter of 2014. Of the 21 units, seven were put up for auction under mortgagee sale.
None of the prime properties placed for auction in the second quarter were sold.
During the quarter, 34 landed properties were put on the block, 17 units or half of which were listed under mortgagee sale.
Knight Frank added: "Amid a tepid residential leasing market as well as weak retail sentiments, 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."