Property consultancy Knight Frank has reported a surge in mortgagee listings in Singapore property auctions during the first quarter of 2025. The increase in distressed sales due to high interest rates over the past two years has started to enter the market. The consultancy’s Q1 2025 report shows that mortgagee sales made up the majority of auction listings, with 83 properties out of 136 total listings. This represents a 48 per cent increase from the previous quarter, when 25 mortgagee listings were recorded. Here are the key statistics from Knight Frank’s report:

The report highlights that residential mortgagee listings climbed by 48 per cent from the previous quarter’s 25 listings. This increase is attributed to the lagged effects of tighter financial conditions through 2023 and much of 2024. “An increase in distressed assets have only now started to be observed entering the auction market,” noted Knight Frank. “This is the first time an HDB shophouse has been put up for auction since Q1 2022, and it shows that the market is becoming increasingly sensitive to financial conditions.”

Furthermore, the consultancy expects that widespread economic disruptions would subject more properties to distress, leading to a further increase in listings. It also expects that global uncertainties could weaken buyer sentiment, but notes that buyers may be attracted to return to the auction in search of reasonably priced assets. Knight Frank’s report also notes that owner sale listings remained relatively stable. Among the 43 listings recorded in the recent quarter, 19 were for residential units (comprising 15 non-landed and four landed homes) and 20 were for retail properties. The remaining listings included one office and two shophouses. In terms of sales, seven properties including five mortgagee sale listings were sold, resulting in a success rate of 5.1 per cent. Total gross sales value stood at S$11.9 million. The consultancy’s head of auction and sales, Sharon Lee, noted that buying sentiment appeared to have shown a slight increase during the quarter. “Buyers on the lookout for opportunities were motivated by the easing of interest rates from September 2024 into making acquisitions,” she said. However, global uncertainties could weaken buyer sentiment as more cautious approaches are adopted. Knight Frank maintains an auction success rate of around 5 per cent for 2025. Auction listings rose 7.1 per cent from the previous quarter and 51.1 per cent year on year, despite the Chinese New Year period, which typically sees slower auction activity. While there was no substantial surge in listings in Q1 2025, this could be the calm before the storm of sweeping global tariffs and a looming trade war.

“The market is becoming increasingly sensitive to financial conditions, and we expect more properties to enter the auction market in the coming months,” said Sharon Lee. “It’s essential for buyers to be aware of the market trends and adjust their strategies accordingly.”

In conclusion, the rise in mortgagee listings in Singapore property auctions is a significant indicator of the market’s sensitivity to financial conditions. As the market expects more interest-rate cuts, Knight Frank expects buyers to return to the auction in search of reasonably priced assets. However, global uncertainties could weaken buyer sentiment, and it’s crucial for buyers to be aware of the market trends and adjust their strategies accordingly.