Mortgagee sales continue to stay high

Sunday 8 August 2010

Mortgagee sale numbers continue to remain high at the moment, and there are now more home owners ending up with forced sales as opposed to property investors.

By The Landlord

Terralink's data shows that the number of registered mortgagee sales increased from 246 in April to 264 in May.

Terralink managing director Mike Donald says there has been a significant change in the type of property owners who are being forced to sell.

"Not only is there an increase in the number of mortgagee sales of properties owned by individuals rather than companies or mulitple owners, but more and more of those individuals are losing their only property - and more than likely it's their family home.

"We all thought last year was a bad year for mortgagee sales when we reached record high numbers. Most of those were property investors who had over-extended themselves during the property boom. This year the pain has shifted to ordinary New Zealand families," Mr Donald says.

In May 2009 just under 50% of mortgagee sales were for properties owned by an individual. A year later that number has increased to 62%, and one in five of those forced sales was held by an individual who only owned one property.

Donald says property owners from the Bay of Plenty, Waikato and Manawatu were hit the hardest in May.

"There were 31 mortgagee sales, more than one a day in the Bay of Plenty - up from 15 the month before. In Manawatu there were 21 forced sales, compared to 12 the month before. In the Waikato there were 51 forced sales in May, up from 28 in April.

"It isn't just the main centres that are being affected, times are tough in the regions too."

Donald says mortgagee sales are usually the end result of many months of financial hardship for the property owner. He says the pressure on property owners is likely to continue for some time yet.

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