Mortgagee sales stay at high levels

Photo / Herald on Sunday

The recession may be receding, but Kiwi homeowners are continuing to lose their houses in mortgagee sales.

Terralink International figures show there were 121 registered mortgagee sales in February, compared to 124 in the same month last year when the country was in the depths of the recession.

The figures come from legal registrations of mortgagee sales.

"The recession is not over in the housing market yet," said Terralink managing director Mike Donald.

Although the number of mortagee sales remains almost unchanged from the same time last year, the latest figure is the first time since November 2007 that the year on year number has dropped.

Although the figure is a 38 per cent dip from January's 196 mortgagee sales, Mr Donald said he expected numbers to rise again for March.

"Historically, we see a dip in February followed by a rise in March and it looks like it will be the same this year," he said.

"Preliminary figures for March indicate numbers will rise again."

Most of the listings are from the larger regions - 45 properties in Auckland (37 per cent), 13 properties in Waikato (11 per cent) and eight properties each in Wellington and Christchurch (7 per cent).

There was also a higher representation in Northland with 11 properties (9 per cent) and Otago, including Queenstown with 10 properties (8 per cent).

This, says the report, indicates possible pressure on owners of holiday homes.

"For the past 27 months, the picture has looked bleaker every month with some months showing year on year increases of up to eight times," said the Terralink mortgagee sales report, issued yesterday.

Last June, mortgagee sales reached their highest monthly total since records began 15 years ago, with 289 properties registered.

Research by real estate information company Property IQ shows buyers could get a bargain at mortgagee auctions.

It said that 88 per cent of properties sold by mortgagee auction between 2004 and 2009 fetched prices which averaged 16 per cent less than market price.

The property listing website Realestate.co.nz has 291 properties being marketed as mortgagee sales.

But despite a high number of listings for non-mortgagee sale properties, the website said sellers were not desperate to sell their properties on the cheap and were prepared to wait for the right price.

"We've got a huge inventory on the market but sellers aren't getting desperate," said chief executive Alistair Helm.

"We are seeing asking prices remain quite steady, reinforcing the sentiment that sellers are becoming accustomed to a longer sales cycle as the new norm for real estate."

The average asking price in April was $422,520 - 2 per cent below the property market peak in October 2007.