Compiled by Rosalynn Poh (The Edge)

What are the reasons for the increasing number of non-performing loans, which has resulted in more properties going under the hammer? Are owners not servicing their loans because of financial difficulties or are there other reasons? One reason could be that property owners are unhappy with their units.

A licensed auctioneer, who wished to remain anonymous, says some high-density condominiums in Port Dickson, for example, are poorly maintained and badly managed.

“Such owners may not be satisfied with their units or may have realised they made a bad investment decision and therefore refuse to service their home loans,” he says. He does not expect such properties to be auctioned off successfully anytime soon.

Both landed and high-rise properties on auction (with a minimum reserve price of RM250,000) were randomly sampled by City & Country, with the majority of the properties located in the Klang Valley, Seremban and Port Dickson.

Properties that were up for auction recently included a leasehold, 2-storey terraced corner house (for the third time and a reserve price of RM252,000) and a leasehold, 2-storey semi-detached corner house (second time and reserve price of RM692,550) in Klang.

Three properties that went under the hammer were successfully sold. One of them was a freehold, 2-storey semi-detached house in Kampung Jawa (second auction). The buyer paid the reserve price for the house — RM297,000.

Another sale was a leasehold, 1-storey bungalow in Kampung Batu Muda, off Jalan Ipoh, which carried a reserve price of RM265,000. The buyer paid RM301,000, nearly 12% above the reserve value. The third property sold was a 2-storey terraced house in Bandar Baru Seri Petaling for RM3,000 above the reserve price of RM387,000 (first auction).

According to a spokesperson at Cahaya Auctioneers, a good property is usually sold at its first auction. “Buyers are always looking for a good deal, so if the property has no bidders and is up for another round of bidding, there is a 10% discount. So, some will just hold back and wait.”

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