19/02/2016

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Mortgagee auctions on the rise

Mortgagee listings at property auctions are expected to increase further this year, reported The Business Times.

“From our experience, a key factor for growth of such listings is foreigners defaulting on loans for their purchase of high-end investment properties. Typically these borrowers do not live in Singapore,” said a banker.

Data from Colliers International showed that mortgagee listings at auctions reached a seven-year high of 241 in 2015, with residential properties accounting for nearly 80 percent of such listings.

The banker explained that putting a property up for auction is a last-resort measure.

“Typically when a borrower defaults – that is, he cannot meet the monthly loan instalments – we call the customer to try and restructure the loan, lengthening the repayment period,” noted the banker.

“Alternatively, we may ask the borrower to try and sell their property on their own – because once the bank steps in, buyers will hope for a fire sale.”

Meanwhile, the eight new listings at Knight Frank’s upcoming auction on Wednesday include an owner’s sale of a four-bedroom apartment with a utility room at The Sovereign in Meyer Road. Sold with tenancy, the freehold property has an indicative price of between $4 million and $4.2 million.

Also set to go under the hammer is the estate sale of a three-storey semi-detached home at Jalan Emas Urai within the Chestnut/Dairy Farm area. Nestled on 2,725 sq ft of land, the 999-year leasehold property spans three storeys and comes with a lift and an open roof terrace. Featuring four bedrooms and a maid’s room, the property has an indicative price of between $3.6 million and $3.8 million.

Separately, Colliers International’s auction on 27 January will include the mortgagee sale of a two-bedroom apartment at The Interlace in Depot Road. The 807 sq ft unit has a price tag of $1.2 million.

JLL’s auction on 28 January will feature two mortgagee sale apartments – a 1,130 sq ft two-bedroom plus study unit on the seventh floor of the freehold Jardin along Dunearn Road and a 1,259 sq ft unit on the fourth floor of The Bayshore. The Jardin unit has a guide price of between $1.8 million to $1.9 million, while The Bayshore apartment has an indicative price of between $1.15 million to $1.2 million.

Although the total number of properties put up for auction (including owner sales and factoring in re-listings) soared to a six-year high last year at 796, only 33 were sold, which translates to a success rate of just 4.1 percent.

Colliers Deputy Managing Director, Grace Ng, attributed the low success rate to the continuing mismatch between buyers’ and sellers’ expectations.

“While banks are guided by valuations in setting their reserve price, buyers often expect a steeper discount in light of falling property prices, the mounting supply of private home completions, rising interest rates and the government’s cooling measures,” said Ng.

To be held at Amara Hotel, all three auctions will start at 2:30pm during their scheduled days.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114772/mortgagee-auctions-on-the-rise

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