Poverty and mortgagee sales up as recession bites

Hawke's Bay mortgagee sales were 40 per cent higher for 2011 than they were for 2010, figures released yesterday by property information and mapping company Terralink show.

There were 57 mortgagee sales in Hawke's Bay in 2010 and 80 in 2011. The biggest pain was felt in Hastings where there was a 57 per cent increase - from 28 to 44.

Social agency Familyworks Hawke's Bay general manager of social services, Lorna Cowan, said demand had grown "significantly" in the last 18 months

"The impact of the recession has increased poverty levels in Hawke's Bay, creating material and social hardship for families which, in turn, affects their ability to meet their commitments to payments such as rents and mortgages," she said.

"With increasing numbers of self-referrals, Familyworks has struggled to cope with the demand within our funding limitations and are referring to other agencies." Nationally for the same period, the number of mortgagee sales fell 7 per cent, from 2434 to 2265, but numbers had risen in the second half of 2011.

Terralink managing director Mike Donald said 2011 was not the year of economic recovery New Zealand property owners had hoped for.

"What we're looking for is a sustained downward trend - right now we're experiencing the opposite," he said.

"In December 2011 there were 223 mortgagee sales, or more than seven per day.

"That's the second-highest ever recorded for a December, and just 49 fewer than December 2009 when New Zealand was at the height of recession."

He said some groups and regions were being hit harder than others.

"Looking behind the numbers, we see the proportion of individuals with a single property facing mortgagee sales increased in 2011, up from 19 per cent in 2010 to 22 per cent in 2011.

"This is equal to the same record high for individuals in 2009. Also, it's more than likely these sales are for family homes, not rentals or investments.

"More Mum and Dad property owners are losing their homes. It's hard to claim things are getting better for ordinary Kiwis while this trend continues."

While some regions experienced a decrease in the number of mortgagee sales, other regions kept rising. Marlborough's mortgagee sales were the highest, up 83 per cent.

Mr Donald said the 2012 outlook was grim, with preliminary figures for January and February indicating mortgagee sales significantly higher than for the same period last year.

Terralink derives its mortgagee sales data from legal registrations of actual foreclosures.