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.