Forced sales in auckland

Mortgagee sales in Auckland are the highest in New Zealand, with more than four times as many forced sales than a year ago...

The sheer volume of residential housing in the city, high median house prices and people being laid off are being cited as factors in the forced sales.

Figures issued yesterday by property and land information company Terralink show a 25 per cent increase nationwide in the past month, with 251 mortgagee sales recorded - the highest monthly total recorded.

Almost half of those sales were in Auckland.

Terralink's Managing Director Mike Donald told the Herald that more individual property owners were losing their homes, which he believed was the result of increasing unemployment and small businesses making less money, leaving their owners struggling to pay bills.

Banks had tightened their lending conditions because of the recession, which also made it harder to meet mortgage payments, he said.

Mr Donald said Auckland had been hit the hardest because of the sheer volume of residential properties, because house prices were higher and because many of the mortgagee sales included complexes where apartments and units were being built but not completed.

The Auckland property market has suffered from an oversupply of apartment accommodation and several large-scale complexes remain unfinished as property development companies went into receivership, which Mr Donald said had also contributed to the city's high mortgagee sale figures.

While some property development companies had gone into liquidation or receivership and owned many titles within one development, figures were recorded as one or two mortgagee sales.

In rural areas, such as Southland, there were no mortgagee sales.

"Some of the provincial areas are a little bit more stable in terms of job losses and things like that," Mr Donald said.

"Southland has a large rural base, it tends to be a pretty stable economy."

Mr Donald said there was no sign of the situation slowing and he predicts it will get worse.

He said mortgagee sale rates tended to "lag behind" the wider economic downturn so he was certain there was more to come.

"When you look at the rate of increase that's occurred from December, it's certainly just continuing to accelerate.

"I'd say that we're in for quite a few more months yet, given that job losses are expected to come."

Five years ago, there were about 45 mortgagee sales each month.

But Mr Donald said figures had been steadily rising since March 2007, when the impact of the global economic downturn began being noticed on the New Zealand property market.

Homeowners struggling to pay bills are advised to talk to their banks early.

Source: www.nzherald.co.nz