Mortgagee sales continue to soar
By Ingrid Hipkiss
TV3 News SUN, 04 JUL 2010
Watch video at TV3
When the credit crunch first hit the property market, it was developers and investors with multiple properties who bore the brunt.
Now, market analysts say the pain is more widespread.
“We’re seeing more and more mortgagee sales affecting the kind of individuals we term ‘Mum and Dad homeowners’,” says property market analyst Mike Donald.
Latest figures show an average of eight properties go under the mortgagee hammer every day, their owners unable to afford their mortgage payments.
That is down from highs of 11 per day in September 2009, but still about seven times what they were pre-recession.
“What people should be doing is going straight to the bank to make a deal,” says property market advisor Olly Newland. “The last thing a bank wants is to take your house back and have another house on its books. They’ll do anything, within reason, to make a deal.”
But the numbers aren’t expected to improve any time soon.
With new taxes on fuel and power, a GST hike due in October and interest rates on the move, budgets will be stretched.
“Every time interest rates notch up another quarter of a percent, there is another wave of mortgagee sales. It could continue for a few years yet,” says Mr Newland. While it’s a low point for vendors, mortgagee sales don’t guarantee a good buy for purchasers.
“They think just because the world ‘mortgagee’ is there it’s an automatic bargain,” says Mr Newland.
“Actually it’s very dangerous, in many cases, when you buy you have to take the property as is – with tenants and faults. There is no come back.”
To add to market turbulence, this week Finance Minister Bill English warned New Zealand’s housing market is still overpriced.