Auction market revs up for busy year with mortgagee listings set to spike

February 25, 2022

SINGAPORE (EDGEPROP) - The auction market is bracing itself for a busy year as more buyers and sellers engage the auction process to transact properties. Furthermore, the end of government moratoriums on some property loan repayments could result in a spike in the number of mortgagee sales hitting the market later this year.

The auction market clocked in a total gross sales value of $85.9 million for the whole of 2021, a dramatic increase of 193% y-o-y compared to 2020. However, the last quarter of 2021 raked in a gross sales value of $15.7 million, which was a 22.6% decrease compared to 3Q2021.

According to a Knight Frank market report, the local auction market recorded 32 sales in 2021, which translates to an overall success rate of about 4.8%. The sales figure includes repeat listings and excludes properties sold outside of auctions, such as private treaty deals.

The relatively high sales value recorded by the auction market last year was largely due to big-ticket properties, says Sharon Lee, head of auction & sales at Knight Frank Singapore. “Many of these listings were known to have been sold outside of auctions after gaining publicity from the auction process,” she says.

More than just distressed sales

A widespread misconception of the auction market is the belief that properties offered at auctions are usually distressed sales. Lee says that this image of the auction market is outdated. “These days, we market different types of property sales at the auctions, such as owners’ sales, sheriff’s sales, developer sales and even MCST (Management Corporation Strata Title) sales,” she says.

An owner’s sale refers to a deliberate attempt by the owner to market and sell the property through auction. A sheriff’s sale involves the public auction of a property that has been seized by the courts.

Developer sales usually comprise new or unsold units in a project that are put up for sale by the developer. Lastly, an MCST sale occurs when the MCST of a development puts a unit up for sale after an owner defaults on the monthly maintenance fees and sinking fund.

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