News: Knight Frank report: Auction listings jumped 23.9% in 2019

Jan 15, 2020

The surge in mortgage sale listings was due to higher retrenchments, hikes in interest rates, and drop in rental payments.

Given the subdued economic growth in 2019, Singapore saw the number of auction listings, including repeat listings, jump 23.9% year-on-year to 1,387 in 2019, revealed a Knight Frank report.

However, the success rate dipped to 1.4% in 2019 from 3.1% in 2018.

“The time taken to sell a property lengthened as prospective buyers preferred to ‘wait-and-see’ before registering a bid that met the reserve price,” explained the property consultancy.

In 2019, mortgagee sale listings rose to 630 from 391 in 2018.

The residential sector saw the number of listings under mortgagee sale increase for the third year in a row, rising 62.6% year-on-year to 356.

Explaining the increase in mortgage listings, the report said: “From 2014 to 2017, the surge in mortgage sale listings was due to higher retrenchments, hikes in interest rates, and drop in rental payments.

“However, from 2018 to 2019, the rise in listings seemed to correlate with more applications for bankruptcies and increased volatility within the equity markets. Slowing economic growth and the trade war between China and United States also led to an accumulation of bad debts and a fall in top-line growths, pressurising some owners to default on mortgage payments”. 

Landed residential listings steadily grew from 2014’s 18 listings to 2019’s 99 listings.

Non-landed home listings under mortgagee sale have also been on the uptrend, rising from 139 in 2018 to 257 in 2019.

“With interest rates staying flat and private rents picking up in 2019, the hike in mortgage sale listings seemed to be a result of slower economic growth,” said Knight Frank.

“The slower economic growth not only impacted owners of upper-middle-income, but also adversely affected high net worth individuals who owned firms that suffered a contraction in orders.”

In fact, the number of listings for penthouses (not limiting to prime districts) placed under mortgagee sales rose from 23 in 2016 to 68 in 2019.

“The penthouses also underwent more rounds of auctioning, averaging 2.6 rounds in 2019 compared to an average of 2.2 rounds in 2018,” noted the property consultancy.

Meanwhile, listings under owner sales climbed from 650 in 2018 to 687 in 2019.

For Q4 2019, however, the number of listings fell 15.4% quarter-on-quarter or 50% year-on-year to 121. Residential listings under owner sale rose from 209 in 2018 to 338 in 2019.

Landed home listings under owner sale increased from 137 in 2018 to 142 in 2019, while non-landed residential listings more than doubled from 72 in 2018 to 196 in 2019.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg

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