More prime residential properties going up for auction
The hike in mortgagee listings for residential properties was attributed to higher interest rates, last year’s cooling measures and the subdued rental market.
The number of residential properties from prime districts 9, 10 and 11 that were listed under mortgagee sale rose 53.8 percent quarter-on-quarter, or 233.3 percent year-on-year to 20 during the first quarter of 2019, revealed a Knight Frank report.
This comes as the number of auction listings under mortgagee sale rose 28.2 percent quarter-on-quarter, or 112 percent year-on-year to 159, with residential listings accounting for 52.2 percent of total mortgagee listings.
SEE ALSO: 7 Questions About Property Auctions
Knight Frank attributed the hike in mortgagee listings for residential properties to higher interest rates, last year’s cooling measures and the subdued rental market.
“With the cooling measures in place, distressed owners were unable to divest their properties quickly and more properties were foreclosed. This led to the 69.4 percent year-on-year increase in residential listings under mortgagee sale.”
Meanwhile, the number of owner sale residential listings also climbed 16.2 percent quarter-on-quarter, or 218.5 percent year-on-year to 86.
“Many owners believed that auction is a good mode of sale because it offers greater exposure for their properties,” said the property consultancy.
In fact, more owners in districts 9, 10 and 11 listed their residential properties for auction, with the listings rising 27.3 percent quarter-on-quarter to 28.
Non-landed residential listings accounted for half of total residential owner sale listings from said districts, of which over 64 percent are two-bedroom units measuring between 650 sq ft and 900 sq ft.
The report also showed that the number of auction listings in Q1 2019 more than doubled to 362 from the previous year, with the five properties sold under the hammer translating to a total gross sales value of $11.6 million.
Looking ahead, Knight Frank expects the number of auction listings for this year to increase year-on-year, mirroring the hike in interest rate and uncertain external environment in the first half of 2019.
“Notwithstanding, the Federal Reserve announced they will not be increasing the rate for 2019,” it said. “Together with an improving leasing market, we may see the number of mortgagee listings stabilising towards the end of 2019.”
What are property auctions? For more information, read our buying guide.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
