Mortgagee sales continue to bite in the Western Bay, with one agent warning home owners in trouble to take action before the bank does.
In the first six months of this year there were 99 mortgagee sales in the Bay of Plenty, similar to a figure of 96 in the same period last year. Nationally, mortgagee sales fell 18 per cent in the first six months of 2011 from a year earlier, Terralink says.
In June there were 22 mortgagee sales in the Bay a 57 per cent increase on the 14 sales last June. April also saw a large rise, from 15 last year to 28 this year.
But May saw a large decline, from 31 last year to 14 this year.
Nationally the website realestate.co.nz listed 455 properties, including sections, for mortgagee sale this week.
There were 12 properties listed in the Western Bay this week, including three apartments at The Quest complex on Maunganui Rd, which features a gym, sauna, spa and large pool.
Properties are varied, from a basic two-bedroom house in Gate Pa to a five-bedroom, three-bathroom home in Pyes Pa.
Other mortgagee sales listed included a section on Caldera Cres at The Lakes, a family home in Ohauiti and a 710sq m section with views of Mauao in Welcome Bay.
The Trade Me website had many of the same properties listed.
Max Martin, franchise owner of Harcourts Advantage Realty, said there was a "steady number" of mortgagee sales, but not many were family homes.
"A lot are investment properties, or something's happened, such as a marriage break-up and one partner can't pay the mortgage.
"[They are] people who have gone out on a limb and got themselves caught out."
Mr Martin said the past three years had seen a high number of mortgagee sales compared with the eight years before that, which he described as a "sign of the times". But he believed the number of mortgagee sales was now starting to drop.
As for house buyers wanting to get a bargain from a mortgagee sale, Mr Martin advised buyers to research carefully before making a commitment.
"Mortgagee sales are a different ball game. They are sold under a different circumstance to a normal house sale.
"There's some fantastic opportunities, some really good bargains, but you must do your homework before you go and bid on an auction there are a few fish hooks."
Those included differences such as arranging insurance "from the fall of the hammer", and the fact that mortgagee sales do not usually include chattels.
Ross Stanway, chief executive of Realty Services which operates Bayleys and Eves, said mortgagee sales were a small proportion of total sales but they were still occurring in the Western Bay.
Sections, holiday homes and investment properties had all featured in recent sales.
"In some instances sadly somebody's own home if they have other interests that have gone sour and it's necessary for the home to be sold.
"We tend to see fewer investment properties because the market over the last two to three years probably saw quite a clearance of those residential investment properties quite early on in the piece.
"When some of the government tax regulations changed, for some investors that was a [motivator] to get out of the market."
Like Mr Martin, Mr Stanway believed the number of mortgagee sales may be declining. "I don't think they are any more prevalent now."
Mortgagee sales tended to attract "significant" buyer interest, and had a good clearance rate at auction, he said. "There tends to be pretty strong bidding for mortgagee properties.
"I guess that's done by people bidding in some instances thinking because it's a mortgagee property, it will be something that they can pick up at an affordable price.
"Sometimes what sells appears to be extremely good value, other times it sort of meets the market."
L J Hooker franchise owner Neville Falconer believed the number of mortgagee sales had dropped since the peak, but "we are not through the woods at this stage at all".
He said it was important for home owners in trouble to act "sooner rather than later".
"It's much better to be able to manage the sale of the property themselves as opposed to having to have it dealt with by people appointed by the bank.
"The quicker that people accept the reality and take action the better. The real key is how [the home owner] takes action and moves on."
Mr Falconer said people who had funding locked in at "difficult" rates were working their way through the mortgagee sale system now.
Many of those forced into a mortgagee sale were not investors but "ordinary people", he said.
Dan Keller, of the Tauranga Property Investors' Association, said it was still a difficult time to be a property investor. "The ones who have been in it for a while are fine. It's the ones who got in late in the game and very highly geared, they are the ones with the problem.
"I'm sure there are people struggling, that's why they have to sell. I don't expect that to change for another year or so."
Terralink said nationally there were 1008 forced sales between January and June, down from 1229 in the same period of 2010.
Mortgagee sales have been above 1000 in the first half of the past three years, with the number "four to five times higher than pre-recession years", according to Terralink managing director Mike Donald.
The number of sales jumped in 2009, when the economy pulled out of recession after contracting for five quarters.
Mr Donald said early on in the recession, forced sales mostly involved developers or individuals with multiple properties. As the recession worsened, more mum and dad investors with a single property lost their homes. In the latest period, 24 per cent of forced sales were of homes owned by individuals with a single property, likely their family home, compared with 20 per cent a year earlier, Terralink said. with APN