The auction market is witnessing the rise of a new trend – the entry of more brand new units.
In fact, two banks has confirmed this new trend in the auction market.
“Maybe five percent to 10 percent of our listings comprise these new units,” said the source from an auction house, noting that more are expected to come under the hammer.
The owners of the properties, most of which are locals, did not bother to take possession of the units. Majority of these units were acquired four to five years ago under the developer interest bearing scheme.
“These unit come directly to us from the developers. These are recently built condominiums with high prices in which buyers had purchased for investment but have decided not to go ahead with the mortgaged payments,” explained a bank employee who heads the auction division.
The source from an auction house said the owners “wanted to flip the units, but because of the weak property market, they were unable to sell them”.
And while most of these units are located in Johor, some are in the Klang Valley.
The trend is not an issue of interest rates since mortgage rates continue to be low at between 4.25 percent and 4.35 percent.
The source revealed that his bank sees over 100 foreclosures per month, of which around 58 percent come under the hammer.
He noted that the number of foreclosure today is “unlike” that seen after the Asian Financial Crisis, when there was a lot more foreclosures.
“It has stabilised,” he said.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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