May mortgagee sales continue to show stress in the market

The latest Terralink report on mortgagee sales show that in May there was a total of 247 registered mortgagee sales. This compares to 251 in April and just 88 a year ago.

A key component of the make up of mortgagee sales as reported by Terralink is the proportion of mortgagee sales that were accounted for by individuals or companies who owned multiple properties. In fact of the 247 mortgagee sales registered in May just 47 properties were classified as “single family homes” – the balance of 200 were properties which were owned as a portfolio of properties by individuals with investment properties or companies which had gone into liquidation or defaulted to an extent that the lender had foreclosed on the properties seeking to salvage the debt.

Judged on the past 15 years the level of mortgagee sales continues to demonstrate that this period of recession has been felt more significantly with close to 1,000 mortgagee sales in the first 5 months of this year – the previous worst start to any year was 2002 when in the January to may period there were 642 regsistered mortgagee sales.

On a regional basis the Auckland region continues to show the highest representation of mortgagee sales – the pair of charts below compares May 2009 with May 2008 and highlights the extent of the polarisation of sales activity to the Auckland region.

Year on year the Auckland region is up over 200% to see 109 mortgagee sales in May, next largest activity is in the Canterbury and Waikato regions with 38 and 27 sales respectively.