Your search results

Singapore Distressed Property Market in 2025: Separating Fact from Fiction

Posted by Jayson Ang on June 23, 2025

| 0

TLDR

Mortgagee sale listings in Singapore rose in Q1 2025, mainly due to higher interest rates in recent years. Despite more distressed properties hitting the market, bargains are rare—banks set reserve prices based on fair market value, not desperation. Only about 5% of mortgagee auctions end in a sale, as most buyers negotiate privately afterward. Desirable properties seldom reach auction; those that do often have issues or are less attractive. If you’re considering buying at auction, manage your expectations and do thorough research. Mortgagee sales make up a small slice of the market, and regulatory measures like TDSR limit fire sales. Whether you should buy, sell, or wait depends on your personal situation—seek professional advice and rely on data-driven insights before making a move.

The rise in mortgagee listings in Singapore during Q1 2025 has sparked interest among bargain hunters. While an increase in distressed properties – homes foreclosed due to financial difficulties – might suggest opportunities for below-market deals, it’s crucial to approach this segment with realistic expectations. Despite popular belief, mortgagee sales are not always a goldmine of cheap properties.

Mortgagee Listings on the Rise, but Context is Key

Knight Frank reported 83 mortgagee sale listings in Q1 2025, a noticeable increase from 67 in the previous quarter. Residential properties accounted for a significant portion, comprising 32 non-landed and five landed properties. However, the auction success rate remained low, with only seven properties actually sold, representing a mere 5% success rate.

The increase in mortgagee sales is linked to the higher interest rate environment of 2023 and 2024. Optimistically, projected rate cuts in 2025 by the United States may ease the situation. Despite the uptick, mortgagee sales remain a small fraction of the overall property market. Regulatory measures like the Total Debt Servicing Ratio (TDSR) help prevent excessive leveraging, enabling most distressed sellers to sell before foreclosure at a reasonable price.

Debunking the Myth of Cheap Mortgagee Properties

Reserve Prices Reflect Valuation, Not Desperation: Banks prioritize recovering as much of the outstanding loan as possible. They engage valuation firms to determine market rates and set reserve prices accordingly. While a lower valuation is possible if the property remains unsold, deep discounts stemming from desperation are unlikely. In cases involving divorce or bankruptcy, court-appointed valuers ensure fair valuations to protect all parties involved. In instances where a property is sold at a very low price, it is probably not one you would want to buy.
Auctions Rarely Conclude with a Sale: The low auction success rate (around 5%) highlights that most auctions fail to meet the reserve price. Interested buyers often contact the selling party after the auction, negotiating private contracts. Therefore, seemingly low bids during auctions are often irrelevant, and private sale negotiations resemble typical property transactions.
Desirable Properties Rarely Reach Auction: If a property is well-located, boasts attractive features, and is reasonably priced, it rarely makes it to the auction stage. These properties are typically sold through conventional listings and marketing methods. Properties that languish on the market, especially expensive penthouses or undesirable units, are more likely to end up in mortgagee auctions. Before bidding on such properties, proceed with caution, as the auction environment provides limited time for thorough evaluation.

Navigating Mortgagee Sales: A Realistic Approach

While attending auctions is generally free (registration is required), don’t anticipate finding extraordinary bargains. Prepare to deposit a check (typically 5-10% of the purchase price) if you intend to bid. Contact the auction firm for specific instructions and assistance.

The Bottom Line

While an increase in mortgagee sales may present some opportunities, be wary of unrealistic expectations. Approach the market with a clear understanding of valuation principles, auction dynamics, and property-specific drawbacks. Thorough research and due diligence remain essential to making informed decisions.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Blog Posts Opinion

Don’t Miss Out: Take Control of Your Life in Your 30s and 40s

Jayson Ang – December 28, 2022 –

TLDR The stages of wealth management vary from ages 30 to 80, with different focuses and considerations at each stage:...

All Buying Tips Opinion

Buy a $1M Resale HDB or a $1M Resale Condo?

Jayson Ang – August 19, 2023 –

TLDR When comparing a million-dollar HDB flat to a private property of the same value, the HDB flat offers more...

Mandarin Top 5

The Best Time to Invest in Singapore’s Property Market: Timing is Everything

Jayson Ang – April 30, 2024 –

Investing in the property market is a significant decision that requires careful consideration and analysis. One crucial factor that determines...

Mandarin Top 5

Top 5 : Golden Tips to Spot a Good Investment Property

Jayson Ang – March 9, 2025 –

Investing in real estate can be a lucrative venture, but it's essential to know how to spot a good investment...

Mandarin Top 5

Top 5 Reasons Why Singapore’s Luxury Property Market Is Booming – Expert Analysis!

Jayson Ang – October 17, 2024 –

Singapore's luxury property market has been experiencing a significant boom in recent years, attracting the attention of investors and high-net-worth...

All Blog Posts Opinion

5 Reasons Why You Should Consider Hiring an Agent Instead of DIY-ing It

Jayson Ang – June 9, 2023 –

TLDR Understanding the complexities of the real estate market and transactions can be overwhelming. Enlisting the help of a real...

Mandarin Top 5

5 Reasons : Can Your Real Estate Investment Hedge Against Inflation?

Jayson Ang – September 10, 2024 –

Inflation is an economic phenomenon that can have a significant impact on an individual's financial well-being. As the cost of...

Mandarin Top 5

Top 5 Overlooked Features that Buyers are Looking for in Singapore Property

Jayson Ang – May 17, 2023 –

The top 5 overlooked features that buyers are looking for in the Singapore real estate market. These are the overlooked...

Mandarin Top 5

Top 5 : Exploring the Streets of Singapore – A Journey Beyond Just Shopping!

Jayson Ang – February 11, 2025 –

Singapore, a vibrant city-state known for its diverse culture and rich history, offers a plethora of unique experiences that go...

All Blog Posts Buying Tips Opinion Selling Tips

6 Indicators and Measures to Determine if Your Home Has Unrecognized Profits

Jayson Ang – November 11, 2024 –

TLDR The booming real estate market presents opportunities for homeowners to profit from selling their properties. Two key signs that...

Mandarin Top 5

Top 5 Rules for Investing in Singapore’s Property Market – Expert Insights!

Jayson Ang – October 15, 2024 –

Investing in Singapore's property market has long been considered a lucrative and stable investment option. With its robust economy, strong...

All Blog Posts Buying Tips

Ready To Make The Jump From HDB To Condo? This Guide Has All The Answers!

Jayson Ang – January 5, 2023 –

TLDR When upgrading from an HDB flat to a condo, consider factors like location proximity, amenities, and regulations. Decide whether...

Mandarin Top 5

Discover Singapore: 5 Must-See Attractions for a Culture Lovers’ Paradise

Jayson Ang – June 21, 2025 –

TLDR Singapore stands out as a top destination for culture lovers, offering a rich blend of heritage and modernity through...

Mandarin Top 5

5 Singapore Property Investing Myths Debunked

Jayson Ang – July 6, 2024 –

In the world of property investing, misconceptions can lead to poor decisions and financial losses. In Singapore, there are several...

Mandarin Top 5

Top 5 Factors: Singapore Offer A Stable And Lucrative Investment Opportunity In Real Estate?

Jayson Ang – May 17, 2025 –

Singapore, a small yet economically powerful city-state, has long been recognized as one of the most attractive destinations for real...

All Blog Posts Opinion

What is Buyer’s Stamp Duty (BSD) in Singapore and How Does It Work?

Jayson Ang – February 14, 2023 –

TLDR When it comes to navigating the Additional Buyers Stamp Duty (ABSD) in Singapore, legal strategies are available to overcome...

Mandarin Top 5

5 Most Common Property Investment Scams To Watch Out For In Singapore

Jayson Ang – June 12, 2024 –

Property investment scams are unfortunately prevalent in Singapore, and unsuspecting investors can fall victim to these scams, leading to significant...