Tag Archives: Mortgagee Sale

More repossessed homes up for auction

Singapore’s weak property market saw the number of homes put on auction by banks increase significantly, reported the media.

From January to October this year, 131 properties of all types were put on sale through auction by lenders or mortgagees, up from last year’s 25 properties, figures from Colliers International show.

Of these, 98 homes were put up for auction by mortgagees — an increase from the 14 homes put up for auction over the same period last year.

Analysts attribute the increase to cautious buyers which make it difficult for borrowers in default to sell their properties on their own.

An auction by Colliers last week featured two 1,926 sq ft units at The Laurels in Cairnhill Road (pictured), while an auction by Knight Frank listed a 1,755 sq ft unit at Botanic Gardens Mansion in Tanglin.

On the other hand, fewer suburban apartments are showing up in mortgagee sales, said Grace Ng, Deputy Managing Director at Colliers International. The units’ lower overall price means that owners can service their loans with less difficulty and find buyers in case they default, added Ng.

Overall, 19 mortgagee properties have been sold for $29.6 million in the first ten months of the year.

Looking ahead, Ng expects the number of mortgagee sale properties to increase to 160 to 170 this year, an increase from last year’s 32 but still lower than 2009’s 195 and 2008’s 270 mortgagee sale properties.

More high-end homeowners default payments

The number of houses placed on the auction block by banks has increased by nearly five-fold as borrowers struggle to sell their luxury units amid the falling prices and the government’s tough cooling measures, according to media reports.

Between January and October of this year, 98 repossessed homes were placed under the auctioneer’s gavel, said Colliers International, a far cry from the 17 for the whole of 2013.

These include non-landed properties at renowned residential projects such as Turquoise at Sentosa Cove (pictured), Reflections on Keppel Bay and Stevens Court at Stevens Road.

“Amid the stricter regulatory and financing environment, borrowers in default are finding it difficult to sell their properties on their own, as buyers generally remain cautious,” added Colliers International’s Deputy Managing Director Grace Ng.

Additionally, due to defaults by high-end property owners, non-performing loans (NPL) of local banks have also substantially increased.

According to United Overseas Bank (UOB), its housing NPLs nearly doubled to $502 million in the third financial quarter from $295 million a year ago. The significant gain is mainly attributed to borrowers who invested in a specific luxury project in Singapore, but the lender declined to reveal its name.

At the same time, Overseas Chinese Banking Corporation’s (OCBC) NPLs rose to $272 million from $227 million. One factor behind the increase is the consolidation of OCBC Wing Hang’s portfolio.

“If you have maxed out your loan quantum and values have dropped, you will have difficulty refinancing, especially if your credit worthiness is not attractive. There’s a possibility that banks may ask you to pump in more money to top up your value. When someone is not able to do so, that may go into the NPLs,” added Chestertons Singapore’s Managing Director Donald Han.