New Zealand property owners hit by mortgagee sales

Country: New Zealand

28 July 2009

An unprecedented number of New Zealand property mortgage sales, in light of record high levels of repossessed homes in the country, are making it harder for existing homeowners to sell their properties, according to data released by Terralink International.

Too many property investors overstretched themselves during the boom years by purchasing multiple investment homes in New Zealand, and are now paying the ultimate price by having their residential units ceased by the banks.

Terralink managing director Mike Donald said the data illustrates that there is still enormous pressure on New Zealand’s housing market at the moment.

“The numbers of mortgagee sales in May is on a par with the previous month, but the number is still at a level unseen in the 15 years we've been recording these figures.

“All indications are that increasing numbers of New Zealanders will lose their properties via mortgagee sales. Early predictions for mortgagee sales in June show the level will reach a new record.”

Terralink International’s research shows that of the total mortgagee sales, 81% of them were for individuals or companies, who owned more than one property.

The majority – 75% - of the mortgagee sales were located in the North Island, with property in Auckland constituting 44% of the residential stock.

Nevertheless, parts of the South Island had also been hit hard in May, with Otago experiencing a 60% rise and Canterbury a 42% increase on April’s mortgagee sales.