Mortgagee sales rose in Q1, Knight Frank reports

SINGAPORE - Mortgagee sales continued to rise in the first quarter of this year, with the success rate for such properties under the hammer increasing as buyers source for bargains, a new report says.

The number of properties offered for auction under mortgagee listings rose 22.7 per cent quarter on quarter to 54 units in the first quarter, according to a Knight Frank report on the auction market out today.

This represented a massive 200 per cent jump year on year, from 18 properties put up for auction sale by mortgagee in the same quarter a year back.

"Persistently weak sentiment" from cooling measures, including the Total Debt Servicing Ratio framework and the softening leasing market, contributed to the residential sector forming the bulk, or 70.3 per cent, of total auction listings during the quarter.

"Owners face daunting challenges to service their mortgage loans with rising interest rates, and are increasingly susceptible to mortgage defaults," said Knight Frank.

At the same time, more properties successfully went under the hammer. 11 properties were auctioned, or an overall success rate of 6.3 per cent; up from 5.4 per cent in the fourth quarter of last year.

The success rate for mortgagee sales properties rose as well to 18.5 per cent, from 15.9 per cent in the fourth quarter.

Total mortgagee sales amounted to about $21.2 million in the quarter, or a 54.4 per cent quarter on quarter increase.

"Buyers are evidently sourcing for 'good bargains' from mortgagee listings in the auction market," said Knight Frank.

All residential properties sold during the quarter were mortgagee listings; the nine homes sold for $20.4 million in all.

Just one sale by owner took place in the first quarter. This was a row of five refurbished shophouses in Teck Chye Terrace.

Overall, the number of properties put up for auction rose 35.7 per cent quarter on quarter to a total of 175 units for the quarter.

Owner sale continued to account for the bulk of properties, at 63.4 per cent, although non-owner sales - including mortgagee sales, estate sales and trustee sales - rose by 20.8 per cent quarter on quarter to 64 units.

Total sales value was also up 161.2 per cent quarter on quarter to $35.8 million.