Forced sales rise in Western Bay

By Amy McGillivray, Teuila Fuatai


Forced property sales across the Western Bay increased in the final months of last year, despite an overall drop in the number of national foreclosures.

Latest figures from Terralink International show 18 mortgagee sales occurred in Tauranga and the Western Bay of Plenty in the three months to December, up from 14 the previous quarter.

The local foreclosure figures contrast with the national trend for mortgagee sales, which dipped to a four-year low.

However, local real estate agents say the spike in mortgagee sales is not necessarily a sign of tough economic times.

Greg Purcell, franchise owner of Ray White Realty Focus in Mount Maunganui and Papamoa, said mortgagee sales were not a real time indicator.

Those hit by the economic downturn could stave off a mortgagee sale for quite some time, meaning people may not lose their house for years after they found themselves in financial trouble, he said. "The numbers that I'm seeing coming out of Hamilton means there is some quite good market action happening in Hamilton.

I think we're generally after [Auckland and Hamilton]. I think if we're going to see any pick up, it will be quite soon."

LJ Hooker Mount Maunganui and Papamoa owner John O'Donnell and Tauranga franchise owner Neville Falconer agreed there had not been a noticeable change in the number of mortgagee sales.

If anything Mr O'Donnell said they seemed to be going down.

"The mortgagee sales must be going down because people haven't been taking the risks they used to take," he said.

Tauranga Harcourts manager Nigel Martin had noticed a large drop-off in mortgagee sales during the past 18 months.

The company had been listing one or two a week but was now seeing no more than one a month.

"The main reason is that the banks are working more closely with those people," he said.

Low interest rates and the improving housing market were also helping.

Western Bay real estate agent Heather Norrish, who deals in the lifestyle property market, told the Bay Times more buyers were returning to the market.

Residential properties priced around $200,000 and $300,000 had the most interest, she said.

The lifestyle property market, which had struggled in the past four years, was slowly beginning to recover, Mrs Norrish said.

"There has been a bit of an upturn with some Auckland buyers coming down to buy lifestyle properties.

"But, we could still do with some more improvement," she said.

In total, 115 forced sales occurred in the Western Bay last year, up from 104 in 2011.

Mrs Norrish was unable to comment on the mortgagee sale figures, but said increased interest throughout the summer months was promising for the Western Bay market.

Nationally, mortgagee sales slumped to a four-year low in the three months to December.

There were 461 forced sales, or 11 per cent less than during the previous three months and 24 per cent fewer than the same quarter in 2011.

Forced sales for the 2012 year totalled 2106, 30 per cent down on 2009 at the height of the recession.

Terralink managing director Mike Donald said Auckland's property market experienced the largest drop in forced sales.

In 2007, 42 per cent of mortgagee sales occurred in Auckland. This declined to 21.5 per cent in the December 2012 quarter, figures showed.

Auckland's buoyant property market is being credited for the fall.

"The supply and demand situation in Auckland means any financially distressed home owners there have a much better chance of selling their home quickly, and at a good price," Mr Donald said.

"Consequently, they are much less likely to face a forced sale by the lender."

While Auckland mortgagee sales have declined, a wider regional breakdown shows forced sales were up in Marlborough, Taranaki, Waikato, Canterbury, Nelson and the Bay of Plenty in the three months to December.

About 78 per cent of mortgagee sales occurred in areas outside of Auckland during the December quarter, up significantly on 2007 figures.

Meanwhile, investor-owners, those who own between three and five properties, accounted for nearly a third of mortgagee sales in the December quarter, slightly up on the previous period.

In contrast, individual mum-and-dad property owners made up just 15 per cent of forced sales as fewer cash-strapped families lost their homes in foreclosures.

Mr Donald said the downward trend in mortgagee sale figures indicated "an end to the volatility which has characterised the last four years".

"This is encouraging news for property owners after a long period of difficulty and pressure."

- Bay of Plenty Times

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