More property owners scrambled to dispose posh assets in 1Q

But number of potential buyers shrunk.

The Singapore auction property market saw the number of properties put up for mortgagee sale increase to 22 in 1Q 2014. This is a relatively high number of mortgagee listings registered for a quarter, considering that there were only an average of 8 mortgagee listings per quarter in 2013 and an average of 6 per quarter in 2012.

Colliers also noted that more high-end residential properties and shop units in older complexes are put up for mortgagee sale.

A total of 132 properties were put up for sale via auction in 1Q 2014, an increase of 10 per cent from the 120 properties recorded in 4Q 2013.

Out of these 132 properties, 110 were put up by owners; of which, many have adopted auction as a complementary mode of sale to indicate their serious intention to sell – on the back of a quiet secondary market. The remaining 22 properties put up for sale were mortgagee listings.

Although the absolute number of mortgagee listings remained low, this is the highest quarterly number of mortgagee sales put up for auction since 4Q 2010. The increased number of mortgagee listings seen in 1Q 2014 could have been the result of a quieter secondary residential property market.

Sales activities in the secondary residential market have been falling for three years since 2010. There were only 7,680 private homes being transacted in the resale market in 2013, which are half the 15,676 units transacted in 2012 and 54.1% per cent lower than 16,736 units in 2011. 

Ms Grace Ng (黄黎明), Deputy Managing Director of Colliers International, says, “The pool of potential buyers in the resale market has shrunk, making it challenging for owners to dispose their properties in the secondary market when they default on their mortgage payments.

There is also reportedly an increase in the number of bankruptcies.This is a different situation from the period between 2011 and 2012 when the buoyant property market was further boosted by a low interest rate and high liquidity environment.Borrowers who were in default of their loan payments could easily sell their properties in the open market on their own.”