Mortgagee listings climb in Q1 as interest rate strains hit market: Knight Frank

[SINGAPORE] Mortgagee listings in Singapore property auctions surged in the first quarter of 2025 as distressed sales due to the last two years of high interest rates have started to enter the market, said a report by property consultancy Knight Frank on Monday (Apr 28).

Mortgagee sales made up the majority of auction listings in Q1 2025, with 83 properties out of 136 total listings. Owner sales numbered 43, along with 10 listings of other types.

Of the 83 listings, 37 were residential properties, and 18 were commercial mortgagee listings. Industrial mortgagee listings numbered 26, while two Housing and Development Board (HDB) shophouses were mortgagee sale listings.

This is the first time an HDB shophouse has been put up for auction since Q1 2022, said Knight Frank. Notably, residential mortgagee listings also rose by 48 per cent from the previous quarter’s 25 listings.

Overall, auction listings rose 7.1 per cent from the previous quarter and 51.1 per cent year on year to 136 units, despite the Chinese New Year period, which typically sees slower auction activity.

The report attributed the rise in mortgagee sale listings 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,” Knight Frank noted.

Further, the consultancy expects that widespread economic disruptions would subject more properties to distress, leading to a further increase in listings.

“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 hits,” said Sharon Lee, head of auction and sales at Knight Frank.

Owner sale listings remained relatively stable, with 43 listings recorded in Q1 2025. Among these, 19 were residential units (comprising 15 non-landed and four landed homes) and 20 were retail properties. The remaining listings included one office and two shophouses. The report noted that interest rate easing in late 2024 may have encouraged some owners to refinance, rather than sell, their properties.

Seven properties including five mortgagee sale listings were sold, resulting in a success rate of 5.1 per cent, higher than the 1.6 per cent recorded in the previous quarter. Total gross sales value stood at S$11.9 million.

Buying sentiment appeared to have shown a slight increase during the quarter, said Knight Frank. “Buyers on the lookout for opportunities were motivated by the easing of interest rates from September 2024 into making acquisitions,” the firm said.

However, global uncertainties could weaken buyer sentiment as more cautious approaches are adopted, the consultancy added.

As the market expects more interest rate cuts, Knight Frank noted that buyers may be attracted to return to the auction in search of reasonably priced assets, as financial strains add more distressed assets to mortgagee sale listings. The firm maintained an auction success rate of around 5 per cent for 2025.