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Huge turnout at property auctions as mortgagee listings surge

Attendance more than doubled in Q1.

Instead of skimming through traditional property sale listings, more buyers and market watchers are choosing to flock to auctions in search of their dream property.

Analysts noted that property auction houses saw a deluge of interested buyers at various auction sessions in the first quarter, while the number of properties put up for sale by mortgagees surged.

According to Colliers, attendance at the monthly auctions conducted by various property auction houses in Singapore have more than doubled to 150-200, compared to 1Q 2014.

"While genuine buyers and market watchers scout for properties at auctions, potential homebuyers are hopeful to tap on opportunities, as owners and mortgagees are genuine sellers with realistic asking prices," stated Colliers.

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Colliers also noted that residential properties made up 82.1% of mortgagee listings in the first quarter. The number of properties put up for auction by mortgagees more than doubled to 56 properties in the first quarter of the year, compared to just 22 properties in Q1 2014.

Mortgagee sales increased because homeowners faced difficulties in servicing their mortgages and found it challenging to dispose their units in the secondary market due to the ongoing cooling measures, loan curbs, increasing interest rates and the mounting supply of residential units, among others.

“The overwhelming turnouts at auction sessions are a testament to the effectiveness of using auction as a mode of sale to reach out to a wider pool of potential buyers,” Colliers noted.

Meanwhile, Knight Frank reported that buyers are evidently sourcing for ‘good bargains’ from mortgagee listings in the auction market. The success rate for mortgagee sales properties climbed to 18.5% in Q1 from just 15.9% in Q4 2014.

According to Knight Frank, all residential properties sold during auctions in the first three months of the year were under mortgagee listings. Successful sales of residential properties dominated the market with a total value of $20.4 million in Q1 2015.

“Buyers could be taking advantage of the lacklustre sentiment and actively participating in auctions, while sourcing for potential value-buys in these auctions. They will also be spoilt for choice with the potential increase in properties offered for auction,” stated Knight Frank.



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