The total number of transacted properties is expected to cross the 40-unit mark by end-2015 amid continuing weak market sentiment.
The Singapore auction market witnessed a strong start to 2015 with notable increase in the number of properties put up for auction and the number of properties sold, according to Knight Frank Research. More properties are expected to be put up for auction in 2H 2015, as owners could face difficulties to lease their units or service their mortgage loans, likely to be further aggravated by continually weak market sentiment and probably interest rates hikes.
The total number of transacted properties is expected to cross the 40-unit mark by the end of 2015.
1Q 2015 kicked off on a positive note with a significant increase of 161.2% from the last quarter, by achieving an aggregate sale value of SGD35.8 million in 1Q 2015.
Total mortgagee sales amounted to approximately SGD21.2 million in 1Q 2015, representing a 54.4% increase from the last quarter.
Successful sales of residential properties dominated the market with a total value of SGD20.4 million in 1Q 2015 – all residential auctions were under mortgagee listings.
Non-owner sales up
The number of properties put up for auction rose by 35.7% q-o-q to a total of 175 units in 1Q 2015, an increase of 46 properties from 4Q 2014. Owner sale properties continued to form the bulk of properties (63.4%) on the property auction market in 1Q 2015. However, non-owner (including mortgagee sale, estate sale, receiver’s sale, etc) properties saw a significant increase by 20.8% q-o-q and 113.3% y-o-y from 30 units in 1Q 2014 to 64 units in 1Q 2015.
Under the non-owner sale category, the number of properties offered for auction under the mortgagee listings saw a notable increase 22.7% q-o-q to 54 units in 1Q 2015. On a y-o-y basis, it represented a massive 200% jump from a total of 18 properties that were put up for auction in 1Q 2014. The remaining 10 properties were trustee and estate sales, made available for sale under non-owner category in 1Q 2015. These properties were residential in nature with a mixed of landed housing and apartments.
Persistently weak sentiment stemming from the property cooling measures on the residential sector, coupled with the Total Debt Servicing Ratio (TDSR) and softening leasing market contributed to the residential sector forming the bulk (70.3%) of the auction listings in 1Q 2015. Owners could probably be facing daunting challenges to service their mortgage loans with rising interest rates and were increasingly susceptible to mortgage defaults.