Singapore auction success rates to be around 5-7% in 2024

This is despite distressed properties accumulating in the platform.

According to the Ministry of Law, there were 1,125 bankruptcy applications made between January and March 2024, some 11.8% higher than the combined applications of October and December 2023, and 17.3% higher than the sum of applications in the same period a year ago. 

Knight Frank says business cessation figures rose by 0.8% to 14,205 entities between January and March 2024 from the 14,091 business that closed between October and December 2023. 

“However, there was an increase of 23.5% in the number of business closures between Q1 2023 and Q1 2024. With the increase in bankruptcy applications as well as business cessations, more private homes by individuals and workplace properties by companies are likely to surface in the auction listings in the second half of the year,” the analyst adds.

Here’s more from Knight Frank:

Additionally, notwithstanding the minimal number of mortgagee listings, residential property owners especially those who had commenced housing loans in 2021 when the interest rate was at its lowest, would have their cost of borrowing rise substantially after three years of fixed rates. The heavier cost of financing coupled with a downward trend in the private home rental market might result in more owners increasingly gravitating towards disposal should this double whammy compromise affordability levels.

Even though the auction platform will continue to collect and accumulate distressed properties for sale, discerning, watchful and opportunistic investors and buyers might comb the listings with a view to acquire these properties at more affordable levels. Therefore, Knight Frank maintains overall success rates to be around 5% to 7% for the whole of 2024.