Mortgage listing keeps growing up for auctions but properties remain unsold as sellers refuse to accept proposals

    • Homeowners with high debts aren’t ready to accept low prices and sell their homes even after their property is listed for auctions amid worsening economic conditions due to Covid-19.
    • Only one property was sold in the first quarter of 2020 as sellers refuse to sell their property at highly discounted prices.
    • Auctioneers expect the prices of the properties to go down by 5-8 percent and an increase in sales when the mortgage deferment period ends on 31st Dec 2020.
    • Year on Year total auctions listing in Singapore drop by 31.1% to 235 in the first quarter of 2020 as compared to Q1 2019 but mortgagee listings grew up by 2.6% to 160.
    • On a percentage basis, mortgagee listings accounted for 68% of total auction listings in Q1 2020 up from 46% in Q1 2019.
    • However, the auction success rate has gone down in the last few years. The success rate went down from 3.8% in 2018 to 1.6% in 2019 with only 21 properties sold during auctions and the first quarter of 2020 has not got any good news for the auctions either.
    • As per Joy Tan, Edmund Tie’s head of auction and sales, there is no distress sale and sellers are moving out due to unfavorable market conditions. She also added that as banks are giving more time to the borrowers the market has come to a standstill.
    • The mortgagee sales view will have a ticked shaped recovery popularly known as “Nike swoosh” in the remainder of 2020 and early 2021.
  • Due to the relief measures taken by the Government, the prices are not expected to drop much and the sellers too will not liquidate their asset prices as the relief packages will help them survive the tough phase.

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