http://www.straitstimes.com/archive/...arket-20141121

More homes go under the hammer in weak market

Big jump in property auctions as banks try to recover unpaid loans

Published on Nov 21, 2014 12:56 AM

By Rennie Whang


SINGAPORE'S weak property market has sparked a big jump in the number of auctions by banks trying to recover mortgages where borrowers have defaulted.

Figures from Colliers International show that 131 properties of all types were put up for auction sale by mortgagees, or lenders, from January to October. That was more than five times the 25 properties in the same period last year. Of that, 98 homes were put up for auction by mortgagees in that period, seven times the 14 homes in the 10 months last year.

Experts say borrowers in default have found it difficult to sell their properties on their own, as buyers remain cautious.

Some upscale homes have been hit, including Marina Bay Residences, The Sail@Marina Bay, Reflections at Keppel Bay and Turquoise in Sentosa Cove.

In prime Districts 9 and 10, units at Thong Sia Building in Orchard Road, The Verv at River Valley and Residences at Killiney were among those affected.

An auction by Knight Frank yesterday featured a 1,755 sq ft unit at Botanic Gardens Mansion in Tanglin, while an auction today by Colliers lists two 1,926 sq ft units at The Laurels in Cairnhill Road as mortgagee sales.

A JLL auction next week includes a unit at Ville Royale in River Valley and a Reflections at Keppel Bay unit.

More luxury properties are showing up in mortgagee sales as the high-end market has suffered for longer, said Century 21 chief executive Ku Swee Yong.

Some may be speculators caught by cooling measures, as values in the high-end market have fallen by as much as 25 per cent and they may be unable to service debt, said Chestertons managing director Donald Han.

Fewer suburban apartments are facing mortgagee sales, said Colliers deputy managing director Grace Ng. The lower overall price means they can service loans more easily and find buyers if they default, she added.

In all, 19 mortgagee properties have been sold for $29.6 million in the 10 months, including 11 homes worth $21.59 million. A big-ticket mortgagee sale this year was a 2,863 sq ft apartment in Draycott 8 off Stevens Road, which sold for $5 million.

Unless government curbs are relaxed, the total number of mortgagee sale properties could swell to 160 to 170 this year, five times the 32 last year, said Ms Ng. Still, this is fewer than the 195 mortgagee sale properties in 2009 and 270 in 2008.

Some believe mortgagee sales are a better bargain given the eagerness of banks to get their money back, but banks must observe a minimum price representing market value, said Mr Han.

Knight Frank auction head Sharon Lee said auctions this year have been better attended - yesterday's was a full house.

Said Mr Tan Choon Hin, managing director of group credit (retail) at UOB Group: "A bank will repossess a property only as a last resort."

If sale proceeds cannot cover the loan, the customer must work out a reasonable repayment plan with the bank for the outstanding amount, said Mr Joseph Wong, head of consumer credit risk at OCBC Bank.

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