The economic slowdown and soft leasing market has led to staff cuts, which caused some affected homeowners to have difficulty financing their mortgages, revealed a DTZ Research report.
This has prompted new auction listings for mortgagee sales to soar 85 percent to 87 units in 2015 from 47 units in the year before, stated the report.
The number of auction listings for owners’ sale also surged to 135 properties last year from 77 properties in 2014.
“Given that properties that command higher price quantum tend to move slower in a quiet market, owners use auctions as an avenue to hasten disposal, so as to release their housing equity,” said DTZ.
Moreover, the report noted that more landed properties and large apartments were put up for auction in the year.
The number of landed properties listed for auction climbed to 53 units in 2015 from 39 units previously, while the number of apartments with a strata area above 2,000 sq ft rose from 17 units to 40.
DTZ expects more choice homes to enter the auction market, given the recent equity sell-off in response to signals of an economic slowdown in Japan and China.
“Sudden shocks in the equity markets tend to be a precursor for more auction listings, as owners need to adjust their financial position. This will offer prospective home buyers a window of opportunity to acquire homes at reasonable prices,” said Dr Lee Nai Jia, DTZ’s Head of SEA Research.
In fact, DTZ’s upcoming auction on 25 February will showcase several luxury homes, including a 4,219 sq ft cluster bungalow in District 21 and two adjacent penthouses in District 15.
Other listings include two split penthouses at the five-storey Veranda apartment development. Located along Lorong K Telok Kurau, just off East Coast Road, each unit has an indicative valuation of between $1.3 million and $1.6 million.
“Under current market conditions, it is difficult to acquire a good quality home through private treaty as the price gap between buyers and sellers tend to be wide due to mismatch of expectations. There are fewer good units available too as owners of such units will wait for the market to rebound first. Hence, auctions this year offer buyers a window of opportunity to seek choice homes at reasonable prices,” said Joy Tan, DTZ’s Head of Auction.