Failed finance companies and the slump in business confidence are forcing some of New Zealand's wealthiest people into mortgagee sales.
Real estate agents and commentators have noticed more million-dollar-plus properties being sold at bargain prices.
The phenomenon has led to big bargains for buyers - and a warning that vendors shouldn't be too greedy.
Some agents said the situation had created a new market that left them struggling to put a value on the cut-price sell-offs.
Nationally, the total number of mortgagee sales continues to rise.
Bernard Hickey, of housing and mortgage website www.interest.co.nz, said there were 290 last week. This was up from 285 the week before and 272 a month ago.
He had been tracking mortgagee sales through realestate.co.nz and Trade Me since March 10 when there were just 211.
Hickey said Aucklanders were the hardest hit, with the city's mortgagee listings rising by almost three-quarters to 158 in three months.
He did not keep figures on property values but confirmed he had seen "a lot more million-dollar mansions coming up for mortgagee sales".
Real estate companies contacted by the Herald on Sunday said they didn't keep figures for mortgagee sales.
But Bayleys national auction manager Hayden Duncan suggested that the company had handled fewer than 20 residential mortgagee sales between 2002 and last year.
The figure had leapt to about six a month in Auckland this year, mostly rental or investment properties worth less than $500,000.
But Bayleys had sold two million-dollar properties by mortgagee auctions this year - one in Orakei for $1.62 million and the other in St Heliers for $1.05m. A third property, close to Milford Beach with a reserve of more than $1m, was passed in at a mortgagee sale last week for $800,000 but agents were continuing talks to secure a sale.
Hickey said the fragile state of the finance company sector and a slump in the housing market were among reasons for the trend.
Property consultant Olly Newland agreed, adding that high interest rates and a drop in business confidence were also to blame.
"There have always been mortgagee sales in the working-class areas, but I've been surprised by the substantial amount of lifestyle blocks and big houses in affluent areas," he said.
Financial planner Liz Koh, of Moneymax, said some high-fliers were having to sell because development had ground to a halt.
"It's the ones who are really the risk takers who have over extended themselves. They are relying on cash flow coming in and all of a sudden it isn't."
She said buyers could expect bargains as banks put pressure on borrowers, with "some significant price drops for people who have to sell".
Jeff Royle, who trades as The Specialist Lender, said the trend was compounded by a lack of buyers.
He said the drop in business confidence was a factor but some might have been forced into a mortgagee sale when their property failed to sell.
Few real estate agents and banks agreed to talk on the record, but some agents talked about "interesting times" and not knowing what price they could get for forced sales of posh pads.
"It's a new market," one said.
Newland said many more hundreds of Kiwis were on the "brink" of mortgagee sales. They would be negotiating hard with their banks to keep their homes by making some contributions.
Kieran Trass, founder of market monitoring site SuburbWatch, advised people trying to sell their homes before a forced bank sale to take any reasonable offer.
He said they shouldn't be greedy and try for a little more because would-be buyers were highly likely to walk away in today's climate.
Trass knew someone whose $1m offer on a property advertised at $1.275m was accepted, but too late. While the seller was deciding, the buyer bought another property. He called it a "mad market" and said sales volumes would soften further over winter.
UNDER THE HAMMER
Luxury properties up for grabs at mortgagee auctions include at least three multi-million dollar sites.
A waterfront Taupo property with more than 2 hectares of land and two homes is being advertised on Trade Me. The properties have a combined rateable value of more than $5.7 million.
Kellands is selling an almost 30-acre Waiheke Island property boasting views across the Hauraki Gulf to Auckland and Rangitoto. According to Quotable Value, it was rated as worth $4.2m in July 2005.
Harcourts is selling an elevated section with two homes on Auckland Rd, St Heliers, only a short walk to the water. It has a CV of more than $3m.
Also on Trade Me, a three-level property in Mellons Bay, Manukau, with panoramic views of Auckland and the Hauraki Gulf, is advertised for almost $1.7m.