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Thread: Mortgagee sales set to rise in 2015

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    Default Mortgagee sales set to rise in 2015


    Dont listen too all the fairytale stories about landed property owners with deep pocket and holding power.
    Its nothing but a mirage

    MORE properties went under the hammer this year, including more mortgagee sales which consultants reckon is a sign of increased difficulties among borrowers to finance their mortgages. This is set to rise further next year, they believe.

    A total of 529 properties of all types were auctioned and 32 of them were sold at a total value of S$72.5 million. This compares to 488 properties auctioned last year, of which 19 were sold for a total of S$91.6 million.

    The number of mortgagee listings surged to 159 from only 32 last year, according to latest figures from Colliers International. Among these, 22 properties were sold for a total of S$36.9 million - more than doubling from last year when 10 properties were sold for a total of S$12.6 million.

    Residential properties accounted for over 70 per cent of total value of properties sold by the banks to recover their mortgages.

    Most market players expect the situation to worsen next year, as borrowers will find it harder to service their loans given rising interest rates and greater difficulty in renting out their units as a substantial number of newly homes stream in next year.

    For now, there is "little cause for anxiety", said Annie Chan, Colliers International director of auction and sales, noting that the number of mortgagee listings has not reached the levels seen in the 2008 global financial crisis, the 1998 Asian financial crisis and the last market downturn in 2004.

    JLL head of auction and sales Mok Sze Sze flagged that there has been a consistent rise in mortgagee sales in the past few quarters.

    "The government's stance of retaining the cooling measures may result in further slowdown in various property sectors," she said. "With the expected dip in property values coupled with a weakening leasing market, owners who are heavily leveraged may find it difficult to cover their monthly mortgage payments."

    Knight Frank head of auctions Sharon Lee projects that there will be more mortgagee sales of residential units as well as strata-titled factories.

    Those who have bought strata-titled factories in recent years probably bought at a high price, Ms Lee noted, but rents are softening due to some government measures and supply ramp-up of industrial space.

    [U][B]Ms Lee noted that landed homes, especially semi-detached houses and terraces, are vulnerable to repossession given their huge quantums.[/B][/U]

    [U][B]This year, landed homes accounted for 11.9 per cent of mortgagee listings. Three landed homes were sold under the hammer - Brighton Crescent at S$9.1 million, Eng Kong Drive at S$3 million and Wolskel Road at S$4.31 million.[/B][/U]

    [U][B]Non-landed homes still made up the majority 65.4 per cent of the mortgagee listings. Big-ticket sales that were hammered include a 2,863 sq ft apartment in Draycott 8 off Stevens Road, which sold for S$5 million, and a 2,109 sq ft unit at Orchard Scotts that was sold for S$3.3 million.[/B][/U]

    While high-end properties in the prime districts have been hit harder by the property cooling measures, shoebox apartments - typically no bigger than 506 sq ft - have lately surfaced in auctions.

    According to Colliers, [U]nine shoebox units were put up for mortgagee sales this year, compared to none in the past four years. Located at various locations like Geylang, Haig Road, Woodlands and Wilkie (Dhoby Ghaut), these units are generally priced below S$1 million.[/U]

    Ms Chan explained that investors who are servicing more than one loan may have felt the heat from the increasingly competitive leasing market.

    "Unless the government curbs on the property market are relaxed, it is expected that the number of properties put up for mortgagee sales will continue to trend upwards to hit 200 in 2015," Ms Chan said.
    "[I]Never argue with an idiot, or he will drag you down to his level and beat you with experience[/I]."

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    Singapore is a land of opportunities.

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    Quote Originally Posted by Ringo33 View Post

    Dont listen too all the fairytale stories about landed property owners with deep pocket and holding power.
    Its nothing but a mirage
    Are you here to kill boredom? Buy few beers sit at Teban reservoir, I am sure you can find lots of members there.

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