_Singapore: Number of mortgagee sales continues to reach new highs in Q3 2017

In Q3 2017, the total number of properties put up for auction saw an increase of 26.7% quarter-on-quarter (q-o-q) or 14.8 % year-on-year (y-o-y), to 209 units. 18 properties went under the hammer, bagging a success rate closure of 8.6%. 12 of the 18 properties sold were mortgagee sales, constituting of 10 residential properties, 1 industrial factory and 1 shophouse. Total sales value increased 33% q-o-q from $29.5 million to $39.3 million in Q3 2017; resulting in a significant y-o-y increase of 85.7 %.

Exhibit 1: Types of Properties Put Up for Auction and Overall Success Rate

Source: Knight Frank Auctions and Knight Frank Research

Exhibit 2: Types of Properties Successfully Sold

Source: Knight Frank Auctions and Knight Frank Research

Looking ahead into Q4 2017, the number of properties to be put up for auction in is likely to surpass that of Q4 2016, to be between 160 to 180 properties. This is amid a steadily rising interest rate set against an uncertain global economic outlook that is largely influenced by a culmination of geopolitical risks and policy uncertainties. As such, the auctions’ market could witness a propagation of mortgagee sales into the near future, contributed by and large via buyers’ financial over-leveraging.

Contrastingly, with improved residential property sentiments, owner sales for residential units could see a decline in Q4 2017 and into 2018, with more owners holding back on their property release in sanguine anticipation of higher future residential spurred on by the record land bid prices in the collective and government land sales fever. 

To read the full report, click here.