Mortgagee Sales Expects to Increase (25 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.

When financial institutions put up some of the repossessed homes on sale, it triggers to increase in coming months

According to Colliers International, auction market is still low but shows signs of increase for this month, and the rise of mortgagee sales are small but may affect the impending constant growth in the market which is pair with the weakening economy.

There are 53 repossessed properties put on sale during the first quarter of the year, 41 of these are residential homes and an increases of 18% from the fourth quarter of 2008.

Grace Ng, auctioneer and deputy managing director says that significant mortgagee sales are expected to increase later part of the year up to 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,” Ng said.

Including the properties that put on sale by owner, a total of 189 actions are recorded during the first quarter of the year but only 6% are sold, a 1% increase from 5% in the fourth quarter last year.

However, the value of deal still increases and more transactions are noted this month. There are eight properties auctioned off this month for a total sale of $12.955 million.

The deals bring up a total value of $17.94million, a striking 234% from the fourth quarter.