Featured image from auction.com
Auction properties have started to become the new craze among homebuyers and investors, especially in the high-end segment. A drastic spike in demand for auction properties began since 2014 and more new properties are expected to come up for auction in 2019.
Such is the case reported by The Malaysian Reserve when talking to a local auction property consultant, Mohd Izwan Abdul Latiff.
Auctioned houses, or “rumah lelong”, are auctioned by banks when owners are unable to keep up with their loan repayments. These properties enter the auction market with below market value price, making them a very appealing option for homebuyers. The existence of an online platform listing these properties makes it easier for them to hunt for bargains.
Mohd Izwan told TMR that people start looking for alternatives to buy affordable properties via auction as they can secure below market value deals. The demand for auction properties rises as a consequence of the ever-increasing launching prices of residential projects.
But, below market value properties are usually accompanied with risks such as legal issues, hidden costs and losing the deposit.
Mohd Izwan also noted that there is no shortage in affordable residential properties for sale in the market, but homebuyers must manage their expectations suited with their own financial capabilities.
The article also reported that residential properties made up 23.4% (RM5.83 billion) of commercial and Islamic banks’ total non-performing and impaired loans as of 3Q2018. Most of these auctioned properties come from major cities like Klang Valley, Johor, Sabah and Penang.
Find the original article here.