{"id":31862,"date":"2020-03-12T16:41:29","date_gmt":"2020-03-12T08:41:29","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=31862"},"modified":"2022-10-06T13:17:28","modified_gmt":"2022-10-06T05:17:28","slug":"mortgagee-sales-seem-to-keep-rising-for-ccr-luxury-condos","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/mortgagee-sales-seem-to-keep-rising-for-ccr-luxury-condos\/","title":{"rendered":"Mortgagee sales seem to keep rising for CCR\/ luxury condos"},"content":{"rendered":"
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Orchard Road<\/a> properties used to be a sure bet; like rain in December, sales at Christmas, or being told to just change schools if you’re bullied. But the recent spikes in mortgagee sales, along with the coronavirus outbreak, may change your mind about this. Take a look at what’s going on:<\/p>\n\n\n\n

Mortgagee sales are rising, and luxury condos are among the worst hit<\/h3>\n\n\n\n

The number of mortgagee sales been on the rise for the past three consecutive years. 2019 was especially worrying, with 630 mortgagee sales (including non-residential properties). That’s about a 61% jump, from 391 mortgagee sales the year before.<\/p>\n\n\n\n

Mortgagee sales of residential units numbered 356 units, up more than 62% from the previous year. In particular, mortgagee sales of condos almost doubled from 139 to 257 listings. And in the prime districts (9<\/a>, 10<\/a>, and 11<\/a>), mortgagee listings rose 233.3%<\/a> year-on-year in Q1.<\/p>\n\n\n\n

Penthouse listings (not necessarily within prime regions<\/a>) tripled to 68 listings in 2019, from just 23 in 2016.<\/p>\n\n\n\n

Why are so many luxury\/ CCR properties going under the hammer?<\/h2>\n\n\n\n

A series of unfortunate events.<\/p>\n\n\n\n

According to\u00a0Knight Frank, it started in 2014 with higher retrenchment rates and interest rates, and a soft rental market.<\/p>\n\n\n\n

Bear in mind that, when it comes to luxury or central region properties, a much higher proportion of owners are investors, not owner-occupiers<\/strong>. Some of them are dependent on tenants to cover the huge loan repayments, so a combination of rising interest rates and lower rental income can make their situation unsustainable.<\/p>\n\n\n\n

In 2018 to 2019, however, there was a different reason. This time, mortgagee sales seemed to rise with the number of bankruptcy applications and stock market troubles. This was the period in which the Sino-US trade war was escalating, and we saw the bubble burst for tech unicorns (thanks, WeWork<\/em>).<\/p>\n\n\n\n

But something\u00a0else\u00a0<\/em>happened in 2018 to make mortgagee sales rise<\/h2>\n\n\n\n

In July 2018, the government announced\u00a0new cooling measures<\/a>. Two of the big regulations to take note of are:<\/p>\n\n\n\n