More newly-completed units going on the block

Mortgagee sales include homes being built as market takes a hammering from oversupply

More newly completed and even uncompleted homes are going under the hammer as the housing market contends with an oversupply from the property boom years and a weak rental segment.

A total of 12 properties either completed in the past three years or still being built have been put up for mortgagee sale so far this year, according to JLL data. This is close to the same number as for all of last year - 13-  and a sharp rise from just three in the same period last year.

A mortgagee sale occurs when a home borrower defaults on loan payments and the bank arranges a forced sale to recover its money.

Among the new completions up for mortgagee sale last month was a four-bedroom unit at Silversea in Marine Parade, completed in 2014. The unit went for $3.9 million or about $1,529 per sq ft.

Also up for sale was a three-bedder at OUE Twin Peaks, the first time a unit at the project is on the block. It was completed last year.

Two of three retail or restaurant units at D'Leedon condominium are being sold at auction this year, on a vacant possession basis. ST FILE PHOTO

Uncompleted developments coming up for mortgagee sale include a bungalow in Mimosa Crescent in Yio Chu Kang and a pair of semi-detached houses in Serangoon Gardens, to be presented at JLL's auction this month. And Knight Frank is handling the bank sale of a three-bedder at Sky Vue in Bishan, which will be completed next year.

Last year, just one mortgagee sale home was uncompleted - a one- bedder at Hillsta in Choa Chu Kang.

"At least three years after the property boom years of 2011 to 2013, the market is feeling an influx of newly completed projects," said Ms Mok Sze Sze, JLL head of auctions for Singapore.

Some investors are off-loading stock four years after buying - just past the period when they would incur seller's stamp duty.

Of the owners' sales at auction so far this year, about 10 units were completed in the past three years, JLL found. Of these, eight are being sold on a vacant possession basis.

These include a one-bedroom penthouse at Guillemard Edge, a three-bedroom unit at Bartley Residences and two of three retail or restaurant units at D'Leedon.

Some newly-completed units on offer include apartments of over 1,500 sq ft, which owners find difficult to sell as prices are typically above $2 million, said Ms Grace Ng, deputy managing director at Colliers International.

Some are penthouses, bought off-plan she said. "Upon completion, the vendors experience difficulty in renting and selling them due to the undesirable layout."

Other new properties are one- bedders priced at $1 million or below, such as small-office-home-office units at euHabitat in Eunos and The Greenwich in Seletar - both up for mortgagee sale this year. euHabitat was completed last year; The Greenwich in 2014.

During the boom, investors were drawn to shoebox apartments, given their low overall prices. But investors who are servicing more than one loan may be feeling the heat from the increasingly competitive leasing market. "Some are unable to secure tenants or are forced to accept lower rents. They could find it a stretch to service their mortgages," said Ms Ng.

•Additional reporting by Wong Siew Ying

Correction note: An earlier version of this article incorrectly stated that a total of 13 properties either completed in the past three years or still being built have been put up for mortgagee sale so far this year, according to JLL data. This has been corrected. It should be 12 properties instead.

A version of this article appeared in the print edition of The Straits Times on May 10, 2016, with the headline 'More newly-completed units going on the block'. Subscribe