Finding a rental in Rotorua is proving tough going. Photo: File
Five Rotorua homeowners were among 28 across the Bay of Plenty who lost their properties in mortgagee sales in the 12 months to September - down from 58 the previous year.
Figures released exclusively to NZME by data analysis company CoreLogic showed the 28 homes were among nearly 450 lost nationally when banks foreclosed on unpaid loans.
As well as the five sales in Rotorua there were seven in Whakatane, eight in Kawerau, two in Opotoki, five in Tauranga and one in Western Bay of Plenty, according to CoreLogic data.
Nationally, foreclosure numbers fell from 589 to 441 year-on-year, or less than a quarter of the number seen during the depths of the economic recession in 2009 when several thousand people defaulted on their mortgages.
Steve Lovegrove, owner of Professionals McDowell Real Estate, said in his firm's experience mortgagee sales were scarce in Rotorua.
"From where I'm sitting, we've seen one or maybe two mortgagee sales come through our business," he said.
"Nor do we see it in our surveys of properties being marketed under the mortgagee process."
Mr Lovegrove said the firm still came across people who were in financial stress and needed to cash up their property for one reason or another.
"But mortgagee sales are certainly not a common occurrence."
Anita Martelli, manager of Ray White Rotorua, confirmed that view, saying she had not seen any increase of mortgagee sales in the area.
Ross Stanway, chief executive of Eves and Bayleys Real Estate, said there were three factors that he thought contributed to the drop in mortgagee sales - tighter lending criteria from the banks, low interest rates and higher home values.
"I don't think that that is an unexpected drop. Certainly over the past couple of years [bank lending criteria] has increasingly tightened up and that affects people's ability to borrow."
Mortgagee sale numbers have been falling nationally for several years. Experts have credited the dip to low unemployment, cheap interest rates and a buoyant housing market.
Although strong house price growth shut countless first-home buyers out of the market, it also allowed many homeowners who were struggling to pay their mortgages to refinance on the back of growing equity in their home, or to sell up before the bank stepped in.
However, there are signs the market is beginning to plateau and interest rates have also begun to edge higher after bottoming out at historic lows.
QV spokeswoman Andrea Rush said Reserve Bank lending restrictions introduced earlier this year, which forced investors to scrape together bigger deposits, had eaten into investor activity, cutting demand for entry-level homes.
"The share of sales to investors has flattened off since winter. It has definitely taken the heat out of the market to a certain extent."
Ms Rush said the low interest rate environment, combined with solid employment figures, had helped keep mortgage rates at bay.
But rising interest rates could put highly leveraged homeowners under increasing pressure, particularly if house prices began to slip back.
"We might find people who can't sell their property for the same price they paid for it, and we may see mortgagee sales edge up again."
A Trade Me spokesman said the website had seen the number of mortgagee sales drop away in recent years. There were 57 mortgagee sale property listings nationwide compared to 96 at the same time last year, and 121 in 2014.
Distressed sales:
-Auckland recorded the most distressed sales in the past year with 70, followed by Manawatu/Whanganui (61), Waikato (50), Northland (42) and Wellington (40).
-Only three of the country's 14 regions saw a rise: Gisborne, Otago, Southland.