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Thread: Mortgagee sale listings exceed total put up for sale last year

  1. #1
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    Default Mortgagee sale listings exceed total put up for sale last year

    http://www.straitstimes.com/business...sale-last-year

    Mortgagee sale listings exceed total put up for sale last year

    Oct 15, 2015

    Rennie Whang


    Fifty-four homes were put up for mortgagee sale in the first nine months of this year, exceeding the 47 for the whole of last year, according to a DTZ report.

    In January to September last year, only 33 homes were put up for mortgagee sale. The jump in mortgagee sales was not so much interest-rate- related, but due to other factors, such as job losses, said Dr Lee Nai Jia, DTZ regional head of research.

    "Some home owners have to default because they lost their jobs due to the consolidation and restructuring of the financial and commodity sectors, while others lost their wealth through the volatile equity and commodity markets."

    Foreign labour restrictions also compound the problem for owners who rely on rental income to finance their monthly mortgages, he added. In such a climate, some highly coveted and rarely transacted properties have come up for mortgagee sale. For example, one DTZ auction next Wednesday features a 1,755 sq ft apartment on the 63rd floor of The Sail@Marina, which comes with three bedrooms, a family room and a study. The unit has a full view of Marina Bay.

    "(Such an apartment) is rarely transacted in the secondary market, given its larger floor area and high storey," said Dr Lee.

    A similar unit on the 66th floor of a different stack was sold for $5.88 million in August last year.

    The indicative valuation for the latest unit is $3.9 million. It is being sold with vacant possession.

    Another rare property at the same auction event is a renovated conserved apartment in Moh Guan Terrace, in Tiong Bahru, which is also up for sale by mortgagee. The 790 sq ft, one-bedroom walk-up apartment on the fifth floor is being sold with vacant possession. The indicative pricing for the unit is about $870,000.

    Hardly any listings are on offer for privatised conserved apartments in the Tiong Bahru area, which tend to have attractive rents of $2,900 to $4,350 a month for a unit of 750 to 860 sq ft, said Dr Lee.

    "Both types of properties are rarely put up for mortgagee sales given their prime location and strong rental potential. In the past five years, only two properties in Marina Boulevard were put up for mortgagee sale, while there were none in Yong Siak Street and the Moh Guan Terrace area," he said.

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    http://www.businesstimes.com.sg/real...ortgagee-sales

    Market volatility seen driving up mortgagee sales

    Some 55 homes put up for mortgagee sale from January to September; highly-coveted and rarely transacted properties may go on the block amid subdued economic growth

    Lee Meixian

    [email protected]

    @LeeMeixianBT

    Oct 15, 2015


    THE sell-off in equity markets, price fluctuations of commodities and the weaker rental market seem to have driven up the number of homes put up for mortgagee (or lender) sale in 2015, DTZ said on Wednesday.

    Close to 55 homes were put up for mortgagee sale from January to September 2015. This is more than the total number of homes put up for mortgagee sale for the whole of 2014.

    Mortgagee sales occur when financially stretched borrowers face difficulties repaying their loans and cannot secure buyers for their properties, so financial institutions have to repossess these properties and put them up for auction.

    Property auctions thus become a good place for opportunistic buyers to get distressed assets at good prices - although they will also have to be decisive enough to sign the contract at the auction once the hammer is knocked down and pay a 10 per cent downpayment upfront.

    DTZ said: "The increase in mortgagee sales is the result of a confluence of several factors. Some home owners have to default because they lost their jobs due to the consolidation and restructuring of the financial and commodity sectors, while others lost their wealth through the volatile equity and commodity markets."

    Singapore's benchmark Straits Times Index lost as much as 17 per cent year-to-date in September before rebounding slightly to 2,983.92 points as at Wednesday.

    DTZ added: "Foreign labour restrictions further compound the monetary difficulties faced by equity-constrained owners who rely on rental income to finance their mortgage payments.

    "With the Chinese economy slowing down and a subdued growth forecast of the global economy, it is likely that highly-coveted and rarely transacted properties will be put up for mortgagee sale."

    DTZ SEA's upcoming October auction sees some rare apartments put up for mortgagee sale - rare because of their prime locations and strong rental potential, it said.

    These include an apartment in The Sail@Marina Bay and a pre-war apartment in the "hipster" Tiong Bahru precinct.

    In the past five years, only two properties located in Marina Boulevard have been put up for mortgagee sale, while there was none at Yong Siak Street and the Moh Guan Terrace area, DTZ said.

    The Sail@Marina Bay apartment is large, with a floor area of 1,755 square feet. It comes with three bedrooms, a study/guest room and a maid's room. Its location on the 63rd floor gives an unblocked view of the bay and the CBD skyline, DTZ said.

    Its indicative valuation is about S$3.9 million - S$2 million less than a similar unit on the 66th floor of a different stack which sold for S$5.88 million in August 2014.

    The other "rare" unit up for mortgagee sale is a conserved apartment at Moh Guan Terrace, Tiong Bahru. It has an area of 790 sq ft and is fully renovated. Its indicative price is about S$870,000, and it has a remaining lease of 51 years.

    According to DTZ, the area is fetching rents ranging from S$2,900 to S$4,350 per month for a unit with a floor area of 750 to 860 sq ft.

    Joy Tan, DTZ's head of auction, said she expects a stronger turnout this time around, as there are more prospective buyers in the market compared to a year ago, now that prices of prime properties have fallen further.

    The auction, conducted by DTZ, will be held on Oct 21 at Amara Singapore Hotel, Level 3, at 2.30pm.

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