SINGAPORE – The number of mortgagee listings jumped in the first quarter of 2023, with more distress sales expected in the second half of the year as bankruptcy applications increase.
The number of bankruptcy applications rose quarter on quarter by 5.6 per cent to 959 in the first quarter of 2023, according to data from the Ministry of Law. It is also 22.2 per cent higher than the number of applications in the first quarter of 2022.
Both property consultancies Knight Frank and Edmund Tie, which hold auctions every month, saw higher numbers of mortgagee listings in the first three months of the year.
Mortgagee listings at auctions conducted by Knight Frank more than trebled to 32 in the first quarter of 2023 from 10 in the previous quarter. However, this was still a decrease from the 47 listings in the first quarter of 2022.
Residential mortgagee listings more than doubled to 18 from the previous quarter, although they were still 14.3 per cent lower than the 21 in the first quarter of 2022. A non-landed home located in St Regis Residences was listed for receiver sale for two consecutive months, and eventually sold outside of auction for $13.5 million.
Knight Frank’s retail and office mortgagee listings in the first quarter also increased to four and three respectively, from no listings in the previous quarter. Meanwhile, industrial listings more than trebled to seven from the last quarter. Knight Frank attributed the increase to a tougher business climate and rising interest rates, which it said have made business continuity challenging.
Of the 32 listings, six were sold at auction and consisted of properties that were small-quantum listings, with transactions ranging from $350,000 to $1.1 million. Most were sold either at a discount or close to their opening price, said Knight Frank. Only one, an office unit in Paya Lebar Square, was sold at 1.8 per cent higher than the opening bid of $1 million, at $1.1 million.
Knight Frank’s 18.8 per cent success rate for the quarter was a fall from the 30 per cent success rate in the last quarter, but still a rise from the 10.6 per cent in the year-ago period.
At Edmund Tie, mortgagee listings nearly doubled to 28 in the first quarter of 2023, from 15 in the previous quarter. Half of the listings were residential, an increase from 10 in the last quarter. However, this was still a decrease from the 30 in the first quarter of 2022.
The company’s retail and office listings also saw an increase from none in the previous quarter to two and five respectively. Retail listings saw a year-on-year fall from 12 in the first quarter of 2022, but office listings increased from three in the previous year. Industrial listings saw a rise to seven from five in the last quarter, although this was still lower than the 11 listings in the first quarter of 2022.
Edmund Tie noted that three industrial units in Yishun and Tuas of 1,755 sq ft, 1,808 sq ft and 2,443 sq ft were sold for $440,000, $460,000 and $350,000 respectively. Meanwhile, two residential apartments of 463 sq ft and 624 sq ft were sold for $790,000 and $955,000 respectively. A 506 sq ft office unit in Paya Lebar was sold for S$1.1 million.
Edmund Tie’s head of auction and sales Joy Tan said most buyers are adopting a wait-and-see approach due to high interest rates and the expected increase in public and private residential supply this year.
“Hence, activities in the auction market are expected to only pick up pace in the second half of the year, when buyers and sellers adjust their expectations accordingly, following a clearer sense of the market,” Ms Tan said.
Knight Frank’s first-quarter report said more business owners may find it challenging to keep their businesses above water, and the firm expects to see more mortgagee listings in the second half, “especially for workplace properties”. THE BUSINESS TIMES
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