Close to 55 residential properties were put up for mortgagee sale from January to September 2015, exceeding the total number of homes put up for mortgagee sale for the whole of 2014, revealed a DTZ report.
The report attributed the increase in mortgagee sales to a confluence of various factors.
Some homeowners defaulted because they lost their jobs due to restructuring and consolidation of the commodity and financial sectors, while others lost their wealth through the volatile commodity and equity markets.
Meanwhile, foreign labour restrictions have further compounded the monetary difficulties faced by equity-constrained owners who depend 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,” it said.
Meanwhile, DTZ’s auction on Wednesday included an apartment at The Sail @ Marina Bay and a pre-war apartment in Tiong Bahru.
DTZ noted that both types of properties are “rarely put up for mortgagee sales, given its prime location and strong rental potential. In the past five years, only two properties located in Marina Boulevard were put up for mortgagee sale while there was none at Yong Siak Street and the Moh Guan Terrace area.”
With a floor area of around 1,755 sq ft, the apartment at The Sail is a 3+family+1 bedroom unit. It is located on the 63rd floor and offers unblocked views of the bay and city skyline.
In August last year, a similar unit on the 66th floor of a different stack was sold for $5.88 million. The current indicative valuation for the unit up for mortgagee sale is $3.9 million.
Meanwhile, the pre-war apartment in Moh Guan Terrace in Tiong Bahru has a lease balance of 51 years and is fully renovated. The 790 sq ft unit has an indicative price of about $870,000.
DTZ said there are hardly any listings for privatised conserved apartments at Moh Guan Terrace in the secondary market.
The area tends to have attractive rents of $2,900 to $4,350 per month for a unit with a floor area of 750 to 860 sq ft.
“We have received many enquiries and viewing requests for both properties, and we expect a stronger turn out in the upcoming auction. There are more prospective buyers in the market compared to a year ago as these prime properties are priced attractively,” said Joy Tan, DTZ’s Head of Auction.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
