As interest rate pressures hit the market, mortgagee listings increased in the first

As interest rate pressures hit the market, mortgagee listings increased in the first quarter: Knight Frank

As buying sentiment improves, the delayed effects of high rates in 2023 and 2024 have led to an increase in listings of distressed assets.

April 28, 2025

CONDOsingapore.com

According to a report released by property consultancy Knight Frank on Monday, April 28, mortgagee listings in Singaporean property auctions increased in the first quarter of 2025 as distressed sales brought on by the previous two years of high interest rates began to enter the market.

With 83 properties out of 136 total auction listings in Q1 2025, mortgagee sales accounted for the majority of auction listings. There were forty-three owner sales and ten listings of other kinds.

Of the 83 listings, 18 were for commercial mortgagees and 37 were for residential properties. There were two sale listings for Housing and Development Board (HDB) shophouses and twenty-six listings for industrial mortgagees.

According to Knight Frank, this is the first HDB shophouse auction since Q1 2022. Notably, compared to the 25 listings from the previous quarter, residential mortgagee listings increased by 48%.

Despite slower auction activity during the Chinese New Year period, overall auction listings increased 7.1 percent from the previous quarter and 51.1 percent year over year.

According to the report, tighter financial conditions through 2023 and a large portion of 2024 had a delayed impact on the increase in mortgagee sale listings. Knight Frank observed that "an increase in distressed assets have only just begun to be observed entering the auction market."

The consultancy also anticipates that broader economic upheavals will put more properties in distress, which will raise the number of listings even more.

According to Sharon Lee, head of auction and sales at Knight Frank, "this could be the calm before the storm of sweeping global tariffs and an impending trade war hits," even though there was no significant spike in listings in Q1 2025.

Listings for owner sales stayed largely unchanged. Of the 43 listings that were recorded during the most recent quarter, 20 were for retail properties and 19 were for residential units, which included four landed and 15 non-landed homes. Two shophouses and one office were among the remaining listings. According to the report, some property owners may have refinanced instead of selling their properties as a result of interest-rate easing in late 2024.

The success rate of 5.1 percent, which was higher than the 1.6 percent recorded in the previous quarter, was achieved by selling seven properties, including five mortgagee sale listings. The total value of gross sales was S$11.9 million.

According to Knight Frank, buying sentiment seemed to have slightly increased during the quarter. "The easing of interest rates from September 2024 encouraged buyers who were searching for opportunities to make acquisitions," the company stated.

However, as more cautious strategies are used, global uncertainties may erode buyer sentiment, the consultancy added.

Knight Frank pointed out that as financial strains add more distressed assets to mortgagee sale listings, buyers may be drawn to return to the auction in search of reasonably priced assets as the market anticipates more interest-rate reductions. For 2025, the company kept its auction success rate at about 5%.