KEY POINTS:
Mortgagee sale - two words likely to place a chill in the heart of homeowners and, according to a number of real estate experts, a phrase we will hear more as the property market continues its decline.
Trade Me has three times as many mortgagee sales listed as
it did in December, up from 13 to 45 in a few weeks, while Auckland's biggest real estate firm Barfoot & Thompson has 23 mortgagee auctions and tenders on its site.
Quotable Value is also reporting more forced or mortgagee sales by banks, although it says its information is still anecdotal.
One man predicting a rash of mortgagee sales in coming months is property expert Kieran Trass. "It's just the tip of the iceberg at the moment," he says. "It will get excessive when things get tougher.
After the boom, everything comes home to roost." Trass said a lot of people were living on "borrowed time".
"Everyone, at the end of a boom, has built up some resources. You can prop it up for a while, but there's going to come a day, and it's pretty close, when you start running out of resources. Things are going to change as bad debts start mounting."
MortgageeAuction.co.nz is a new website aimed at property owners and real estate agents dealing with mortgagee sales.
"I do believe they are on the rise," said Jeremy Pyle who set the site up before Christmas. "A lot of agents who have never had mortgagee sales before are doing them."
It is free to list properties on the site and Pyle said he hoped it would help people to get the best deals for their properties in a "sad" time.
Real Estate Institute president Murray Cleland said there was no "hard evidence" to back up claims of increased mortgagee sales... and people were reluctant to talk about it.
"People go through a denial process, like it's not actually happening to them. Then it hits home that it's happening. People on low incomes don't have the resources to fight it."
Trass said an upsurge in mortgagee sales was "normal" at this stage of the property market cycle and it would be short-lived. "It will only last for one or two years because people tend to get 'flushed out' within a year or two. If you can hold on for a few years, you won't get flushed out. In property you have the luxury of time - for a while."
"It's incredible how people can manage their way through financial difficulties," added Cleland. "The family may come through or money comes from other sources."
He said people should look at all options, and properties could always be withdrawn from mortgagee auctions, even at the eleventh hour. "People have got that right, up till the fall of the hammer."
