{"id":48526,"date":"2022-02-17T17:51:35","date_gmt":"2022-02-17T09:51:35","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=48526"},"modified":"2022-06-13T17:58:01","modified_gmt":"2022-06-13T09:58:01","slug":"properties-auction-mortgagee-listings-2021-residential","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/properties-auction-mortgagee-listings-2021-residential\/","title":{"rendered":"Properties being auctioned: 47.4% (137) of mortgagee listings in 2021 were residential properties"},"content":{"rendered":"
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While the overall property market remained resilient in 2021, the number of retail properties forced onto the auction chopping block has seen a notable increase.\u00a0<\/span><\/p>\n

According to the Q4 2021 report<\/a> from Knight Frank, a total of 670 properties were put up for auction in 2021, which was an increase of 35.4% year-on-year. Part of this increase came from owner sale listings, which almost doubled year-on-year to 352. Among the mortgagee listings, residential properties made up 137, or 47.4%, with 83.2% (114) of them being non-landed.<\/span><\/p>\n

What is a mortgagee-sale?<\/strong> A\u00a0<\/span>mortgagee-sale<\/span><\/a>\u00a0happens when a property owner is unable to service the loan, forcing the bank to step in and foreclose on it. An auction is then held to fast track the liquidation of the property.<\/span><\/p>\n

The majority of auction listings consist of shop units and other commercial properties. This is split between mortgagee-sales by property financiers and direct owner listings, with the latter having a massive jump from 17 units in 2020 to 101 units in 2021.<\/span><\/p>\n

Spike in auction properties due to Covid-19\u00a0\u00a0<\/span><\/strong><\/h2>\n

Many of the auction-listed properties in 2021 fell within the category of commercial units, primarily in the retail sector. In 2021<\/span>, 84 retail properties were put up for sale – a 62% increase from 52 in 2020.\u00a0<\/span><\/p>\n

One of the causes was the recurring Covid-19 restrictions imposed by the government. The restrictions inevitably impacted retail businesses that relied heavily on foot traffic. Those affected could not recover in time and were ultimately forced to shutter.<\/span><\/p>\n

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Many businesses were unable to mitigate the losses and were forced to shutter during the pandemic<\/figcaption><\/figure>\n

These auction listings would also see properties being sold significantly below the listing price. A ground-floor shop unit located in The Midtown mall at Upper Serangoon Road sold for S$1.07 million. This comes up to approximately S$3,654 psf, 2.8% lower than its opening price.<\/span><\/p>\n

This bump in owner-sale auction listings in 2021 may be due to direct owners not having as much holding power as banks and financial institutions.<\/span><\/p>\n

In contrast, mortgagee-sale listings fell by 5.6% to 289, with residential listings making up almost half.\u00a0<\/span><\/p>\n

Slow start to the year\u00a0<\/span><\/strong><\/h2>\n

Buying sentiment may be lower during the first quarter of 2022, as some buyers opt to adopt a wait-and-see approach after\u00a0<\/span>new cooling measures<\/span><\/a>\u00a0kicked in on 16 December 2021. Those prowling the market for a second or subsequent property would be subjected to an increase in\u00a0<\/span>additional buyers stamp duty<\/span><\/a>\u00a0(ABSD).\u00a0<\/span><\/p>\n

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Investors might hold off to see how the property market responds to the new cooling measures before dipping their toes into the auction market<\/figcaption><\/figure>\n

With a quieter auction market, listed properties may take longer to sell as the residential sector reorients itself to the cooling measures.<\/span><\/p>\n

As ABSD does not affect commercial properties, the demand in that segment remains unaffected.\u00a0\u00a0<\/span><\/p>\n

Residential properties: Going once, going twice, SOLD<\/span><\/strong><\/h2>\n

While most of the mortgagee sales involved commercial units, residential properties on the other end were not spared either. Out of the 137 residential mortgagee listings in 2021, a large part of it was made up of non-landed residential properties.<\/span><\/p>\n

Among the list of residential properties being auctioned in 2021, here are some highlighted in the Knight Frank report:<\/p>\n