Increasing Number Of Large Apartments Up For Mortgagee Auction Sale In Singapore

The top end of the Singapore housing market continues to find the going tough and a recent report from Colliers International has highlighted the rise in auction listings.

The Singapore property auction market saw a total of 378 auction listings in the first half of this year. This is 38.5 per cent higher than the 273 listings in 2H 2014.

Of the 378 properties, 105 were mortgagee listings – an increase of 10.5 per cent from the 95 listings in 2H 2014. There was no spike in the number of mortgagee listings, as employment figures remained high, and owners are able to continue servicing their mortgage loans; this is in spite of an impending increase in interest rate and an upcoming over-supply of residential homes.

Residential homes accounted for the lion’s share at 79.1 per cent of the mortgagee listings in 1H 2015. Among them was a Good Class Bungalow site at Binjai Rise; this was the first time after 8 years since 2007 that such property type was put up for auction sale by the bank.

A further breakdown reflected that only 14.3 per cent of the mortgagee listings were landed houses, while the bulk, or 64.8 per cent, were non-landed residential homes.

It has been observed that there is an increasing trend of large apartments with unit floor area of more than 1,500 sq ft being put up by mortgagees for auction sale.

Examples of apartments with floor areas larger than 1,500 sq ft that were put up by mortgagees in 1H 2015 include:

Residences at Killiney in District 9 (5,059 sq ft)

Seascape @ Sentosa Cove in District 4 (4,133 sq ft)

Stevens Court in District 10 (2,863 sq ft)

The Grange in District 10 (2,303 sq ft)

Ms Grace Ng, Deputy Managing Director of Colliers International, said, “Owners of large apartments are finding it challenging to sell them, as the large unit floor area translates into a higher price quantum. Some of these larger units are two-storey penthouses with large open terraces or balconies and a private swimming pool.”

She continues, “These sizable non-landed homes, which were popular during the market boom in 2007/2008, are now languishing in demand – suffering from a wane in both foreign and local buying interest due to affordability concerns that followed stringent loan curbs.

Furthermore, with the decrease in the housing budget among expatriates, owners are also finding it challenging to secure tenants, which resulted in difficulties to service the mortgage loan for their homes.”

The cooling measures and loan curbs in the property market, increasing interest rates and a mounting supply of residential units have made it difficult for owners to dispose their properties. At the same time, investors also found it challenging in leasing their properties, on the back of the competitive supply of completed homes for rent.

 

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