Written by: Syasya Nur
Due to an increasingly challenging economy brought by COVID-19, the real estate market is seeing a rise of property auctions.
In a recent research report in March, property auction listings are predicted to rise by 10%. These auction listings consist of both owner and mortgagee sales. Mortgagee sales are properties that are put up for sale by the bank when the owner is no longer able to pay off the mortgage. Unsurprisingly, the proportion of mortgagee sales relative to the total number of auction listings saw a substantial increase from 46% to 68%.
Despite the increase in auction listings in May, not all led to closed home sales due to mismatched buyer and seller expectations.
Residential Properties Comprise Majority of Mortgagee Sales
In 2019, most of the mortgagee sales consisted of residential properties. These properties amounted to a total of 356 out of 1,320 auction listings. This was a 61% increase from 2018’s 221 residential mortgagee listings – making the residential market one of the most volatile sectors. Only the industrial sector saw an increase in mortgagee sales from 35 in Q1 2019 to 50 in Q1 2020.
Auction Listings Decreased in Q1 2020 Compared to Q1 2019
In Q1 2020, total auction listings in Singapore fell by 31.1% compared to Q1 2019 to 235 listings. However, mortgagee sales still saw a 2.6% growth year on year, with 160 more listings in 2020’s first quarter.
Despite the increase in listings, auction success rates continue to fall. Only 21 properties were sold during auctions in 2019 – a success rate of 1.6%, down from 3.8% in 2018 . This implies that a more cautious sentiment has spread throughout the buyers’ market.
Want to buy or sell your property during the COVID-19 pandemic? Read our FAQ for insights or speak to top-notch in-house property agents.
