Tag Archives: Auction

More properties under the hammer in 2015

Singapore’s auction market saw 60 properties listed in Q4 2015, bringing the total number of new listings to 215 for this year, revealed a DTZ report.

According to the property consultancy, the number of properties put up for auction has steadily increased since the TDSR framework was introduced in 2013. Notably, there were 136 new listings in 2014, up from 82 in 2013.

“Both the number of listings for owner sales and mortgagee sales went up significantly year-on-year,” said DTZ.

Owner-sales listings increased from 74 properties in 2015 to 125 in 2015, while mortgagee-sales listings climbed from 47 listings in 2014 to 78 in 2015. Of the 215 properties listed this year, 138 were non-landed residential apartments, and 48 properties were landed homes.

The listings with the highest opening bids in 2015 were dominated by landed properties, which included the landed residential property at 25 Branksome Road at S$15 million and 35 Binjai Park, a Good Class Bungalow, at S$35 million.

The average gross floor area for landed properties listed in auction increased from 4,077 sq ft in 2014 to 4,297 sq ft in 2015, while that for the residential apartments increased from 1,430 sq ft in 2014 to 1,880 sq ft this year.

Overall, the success rate of selling during or before the auction stood at around 13 percent in 2015, down from 2014’s sale rate of 14 percent. Of those successfully sold, 23 were non-landed homes.

There were also more successful bids for larger non-landed homes in 2015 compared to those in 2014. The average floor area of those successfully auctioned climbed from 1,382 sq ft to 1,624 sq ft, with average prices at around S$1.6 million.

The prices of the successfully auctioned properties were usually sold at a discount from 3.5 percent to six percent, said DTZ. However, the price cuts for attractive properties at choice locations is lower as these properties are rarely available for sale.

“Choice properties, especially those that are rarely available in the market, attract a lot of buyers’ interest due to its scarcity. Additionally, we see more buyers willing to purchase these units of higher quantum despite the Additional Buyers’ Stamp Duties, as they offer great value for money,” said DTZ’s Head of Auction Joy Tan.

Luxury homes face nearly $3m in losses in mortgagee sale

TWO luxury homes in Singapore are on the market at prices that would mean losses of nearly $3 million each as the local property market continues to weaken.

The mortgagee sale of the two units in Turquoise, a luxury Sentosa Cove condominium, at fire-sale prices comes amid signs that banks are forcing more cash-strapped owners to offload property to meet loan shortfalls.

The units, understood to belong to one owner, are on sale for about $1,600 per sq ft (psf) – an asking price of $4.5 million to $4.6 million apiece, which would mean losses of about $2.7 million each for the 2,777 sq ft units.

Caveats lodged with the Urban Redevelopment Authority showed that both apartments were bought in November 2007 at about $2,600 psf. Current market prices are $2,000 psf to $2,200 psf.

But the losses are still less than those suffered from the sale of two other 2,777 sq ft apartments in the project earlier.

These two apartments in the 91-unit project went under the hammer as distressed sales in July, and were sold for about $1,400 psf. At least one of the units was sold by DBS Bank, sources said.

The units had been bought in 2009 for about $2,550 psf but ended up suffering losses of up to $3.2 million.

Homes are put up for mortgagee sales when financial institutions try to recover their losses after a borrower defaults on a loan.

Experts say luxury homes are more likely to face forced sales, given the large sums involved and the fact that speculators may be involved.

Fewer suburban units are facing mortgagee sales, Colliers deputy managing director Grace Ng said last week.

The lower total price means the owners can pay their mortgage more easily and find buyers if they default, she added.

Mr Tan Tee Khoon, executive director of residential services at Knight Frank Singapore, said defaulting borrowers could have had difficulties selling their properties in the tepid secondary market, while an increased supply of new units in the prime districts means that it is harder to find a tenant.

“Sentosa’s exclusive location makes it less accessible than homes on the main island and harder to lease now,” he said.

“Also, borrowers who default are more likely to have been speculators.”

The property market has been buckling under the weight of cooling measures, with the luxury segment bearing the brunt of the slowdown on the back of dwindling demand and borrowing restrictions.

A total of 98 homes were put up for auction by mortgagees in the first 10 months of the year – far more than the 14 homes in the same period last year.

Housing loans for the third quarter came under close scrutiny as the three local banks released their financial scorecards last month.

DBS chief executive Piyush Gupta said the bank was not seeing any stress in its mortgage loan book. But United Overseas Bank and OCBC Bank posted higher non-performing loans from bad mortgages, attributing the rise to borrowers who bought luxury homes.

UOB disclosed only that the rise in bad home loans was mostly the result of mortgages at one luxury condominium, but Maybank Kim Eng analysts Ng Wee Siang and Ng Li Hiang noted in a report that it was “largely from one key project in Sentosa”.

Meanwhile, two units were put up for mortgagee sale at a Colliers auction last Friday. The three-bedders at The Laurels in Cairnhill had opening prices of $4.1 million and $3.6 million but were not sold.

The Straits Times understands that the units were put up for sale by UOB.