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Mortgagee sales of luxury condos, strata industrial units to spike in 2016

By Cecilia Chow / The Edge Property | January 28, 2016 10:00 AM MYT
Tags: mortgagee salesluxury condosstrata industrial

Despite the usual year-end lull, two luxury condominiums were sold under the hammer at property auctions this month. One was a 2,174 sq ft, three-bedroom duplex at Orchard Scotts that fetched $3.06 million ($1,408 psf) at Knight Frank’s auction on Dec 8. The other was a 2,013 sq ft, four-bedroom unit at St Thomas Suites that was sold for $3.6 million ($1,788 psf) at DTZ’s auction two days later. Both were mortgagee sales.

Of the top 10 auction deals in 2015, two were estate sales, three were owners’ sales and the remaining five, mortgagee sales. Of the handful of mortgagee sales, four were freehold condos in prime districts 9 and 10 with sizes of more than 1,500 sq ft and priced between $3 million to $6.45 million. Incidentally, Colliers brokered six of the 10 most expensive properties sold at auctions this year (see table).





Source: Colliers





Source: Colliers



Incidentally, 77 out of 142 apartments and condominiums put up for mortgagee sale in 2015 were of apartments that were larger than 1,500 sq ft, according to Colliers. The trend of sizeable high-end condos and landed homes put up for auction is expected to continue into 2016, says Grace Ng, deputy managing director of auctions and sales at Colliers International. Mortgagee sales of such properties is also expected to see an increase next year.

“Luxury condos were popular during the market boom in 2007/2008, but have fallen out of favour owing to the drop in both foreign and local buying interest,” says Ng. “The main stumbling block is the restrictive loan curbs, which makes it difficult to find buyers for properties priced above $2 million.”

These premium apartments are therefore only within reach of the well-heeled, be they investors or owner occupiers. Buying opportunities have emerged in the Core Central Region — Marina Bay and CBD in district 1, Sentosa Cove in district 4, and the traditional prime Orchard Road districts of 9, 10 and 11 — as prices have declined 8.6% from their peak in 1Q2013, according to URA data as at end-3Q2015.

Owners of high-end condos are also finding it challenging to secure tenants amid a weak leasing market “plagued by supply woes and shrinking expatriates’ housing budgets”, says Ng.



A three-bedroom duplex was sold for $3.06 million on Dec 8


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