Mortgagee sales hold at elevated levels, with more "mum and dad" owners evident

Thursday 6th October 2011

Mortgagee sales fell 18% in the first six months of 2011 from a year earlier, while remaining at elevated levels and with more single property owners evident, according to Terralink.

There were 1,008 forced sales between January and June, down from 1,229 in the same period of 2010, the property and land data company said in a statement.

Mortgagee sales have been above 1,000 in the first half of the past three years, with the number “four to five times higher than pre-recession years,” according to Terralink managing director Mike Donald.

The number of sales jumped in 2009, when the economy pulled out of recession after contracting for five quarters.

Donald said early on in the recession, forced sales mostly involved property developers or individuals with multiple properties. As the recession worsened, more mum and dad investors with a single property lost their homes.

In the latest period, 24% of forced sales were of homes owned by individuals with a single property, likely their family home, compared to 20% a year earlier, Terralink said.

“A mortgagee sale is the result of months and months of economic hardship so we are likely to feel the sting of the prolonged economic downturn for a while yet, even if we are seeing signs of economic growth,” Donald said.

BusinessDesk.co.nz

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