The chief executive of realestate.co.nz, Alistair Helm, agreed that borrowers selling their houses before the bank foreclosed on the property were reducing mortgagee listings.
"Because property's moving, if people are concerned that they can't afford the excessive mortgage that they've managed to bear for the last three years, it can sell reasonably easily which avoids having to go to the bank and saying, 'We can't afford this mortgage any more'," he said.
As well, interest rates are much lower than they were in 2008 which meant more people could afford to keep paying mortgages, Mr Helm said.
Even in 2009, when the recession was at its worst and there were the most mortgagee listings, they still accounted for only three-quarters of 1 per cent of the total property listings, he said.
"We never suffered as they suffered in the US ... their mortgagee situation got as bad as over 10 per cent of the properties being mortgagee or underwater, which is what they call repossessions - that was the worst in the world but it was a reflection of the whole property market."
In 2009, New Zealand hit its peak of mortgagee listings with more than 2500 listed on the Auckland market and almost 18,000 listed nationally.
Ms O'Sullivan said that in 2008 there was a "clean out" in which a lot of people over-extended themselves and invested in properties they thought would increase in value.
"Interest rates were rising and property rates were sinking, so it was really easy to get yourself into trouble ... people were essentially borrowing money to play at the casino, if you like."
That had a knock-on effect which forced owners to forfeit their homes to the bank, causing a jump in mortgagee listings in 2008 and 2009.
Mr Helm suspected that a slight growth in the number of listings late last year was down to banks putting properties up for sale once the market had stabilised.
"They had held back a little bit, not wishing to distress the market because a bank foreclosing on a property takes a risk that if they try to dump it on the market, you can have a catalytic effect that brings more properties into mortgagee default," he said.
"That's because distressed properties tend to go for cheaper [prices] and so that brings down average prices which forces other people to realise they're underwater in valuation."
Bank of New Zealand chief economist Tony Alexander said the data reflected the cycle of people moving from main centres into rural areas in the early 2000s because the currency was low for about five years, while farming commodity prices were high.
The downside was that during that period construction was weak in Auckland, which meant the city came out of the downturn with an undersupply of property.
When people moved back to the main centres, property prices edged up and it became a seller's market.
"The investors have become more over-stretched in the regions than they have in Auckland during the 2000s and this is the pay-back," Mr Alexander said.
Last month, it was revealed in the Herald that complaints about mortgage finance had almost doubled since before the financial crisis.
Last year Banking Ombudsman Deborah Battell's investigation team looked into 118 cases which banks had been unable to resolve.
The number was almost double the 2007 figure and was now 40 per cent of the investigation workload.
