Mortgagee sales tipped to rise

Source : Straits Times - 28 Mar 2009

MORTGAGEE sales - when repossessed homes are put on sale by financial institutions - have been few and far between so far but they are tipped to increase in the coming months.

The auction market remains weak but showed signs of life this month, said Colliers International yesterday.

There were 53 repossessed properties - 41 were residential - put up for sale in the first quarter, up 18 per cent from the fourth quarter last year.

Colliers said the rise may be small but it indicates an impending trend of continued growth, which is in tandem with the deteriorating economy.

Deputy managing director and auctioneer Grace Ng said a more significant number of mortgagee sales is expected later this year or next year.

‘This is due to the lag time of approximately six months or more between when a buyer defaults on his loan repayments and when the bank repossesses the property and puts it up for auction sale,’ she said.

Together with properties put up for sale by owners, there were 189 auctions in the first quarter but just 6 per cent were sold, up slightly from the low 5 per cent in the fourth quarter of last year.

Still, the value of deals rose and there were more transactions this month. Eight properties were auctioned off this month for a total of $12.955 million.

These transactions bring the total value done in the first quarter to $17.94million, up a striking 234 per cent from the fourth quarter.