Mortgagee sales near record high at 5% of total sales as indebted owner occupiers start defaulting too

Terralink International has reported there were 287 registered mortgagee sales in November, down 4% from October but nearly double that seen in November a year ago at the trough in the housing market. Terralink Managing Director Mike Donald said the November result was not far below the record of 343 reported in September and sales are expected to remain high through 2010, even if there is another fall in December. Owner occupiers are now increasingly being affected by mortgagee sales as banks and other financiers grind their way through an often long-winded process. Previously most sales were focused on property developers and property investors. "We'll probably see a dip in mortgagee sales in December too because December is a slow month for house sales overall," Donald said in a statement released at Zoodle.co.nz

Auckland, Otago, Nelson and Northland all experienced an increase in mortgagee sales in November, while the rest of New Zealand had either decreased or stayed the same as the month before. Mr Donald said during the first part of 2009 property investors and developers who owned multiple properties accounted for the majority of the rising number of mortgagee sales. "As the year went on and the effects of the recession deepened, it was increasingly individual owners with a single property, typically the family home, who were losing their properties to mortgagee sales. Once we have December's data we'll be able to track the full 12 months and have a complete picture of the effect the economic downturn has had on mortgagee sales." Mr Donald said he didn't expect to see the number of mortgagee sales decrease significantly this year. "By the time a mortgagee sale is necessary a person has probably experienced a long period of financial woe. Forced sales don't usually happen overnight. Therefore, we may still see high numbers of mortgagee sales for the remainder of 2010, despite reports that the economy is now in recovery," Mr Donald said. Mortgagee sales accounted for almost 5% of the total nationwide property sales in November. Terralink derives its mortgagee sales data from legal registrations of actual mortgagee sales.