Mortgagee sales have dropped to their lowest level in four years
Figures from location intelligence company Terralink International show there were 461 mortgagee sales in the quarter from October to December 2012. This is 11% less than recorded in the previous quarter and 24% less than the same quarter in 2011.
The total number of forced sales in 2012 was 2,106, the lowest since 2008 and 30% less than the 3,024 recorded in 2009 at the height of the recession.
Terralink Managing Director Mike Donald says the latest figures confirm a sustained downward trend that began in mid 2012.
“Volumes are continuing to fall nationally, and we’re also seeing an end to the volatility which has characterised the last four years.
“This is encouraging news for property owners after such a long period of difficulty and pressure,” Mr Donald says.
Auckland property owners receiving the greatest relief
At a regional level, however, the outlook is more mixed. Terralink’s figures show that while the number of forced sales in Auckland decreased by 26% quarter on quarter, other parts of the country experienced increases.
Marlborough, Taranaki, Waikato, Canterbury, Nelson and Bay of Plenty all experienced quarter on quarter increases.
Mr Donald says a split is emerging between Auckland and the rest of country, with towns and cities outside our main economic hub making up a greater percentage of forced sales.
In 2007, 41.5% of mortgagee sales were in Auckland. That has been steadily declining year on year, and in the last quarter just 21.9 % of mortgagee sales were in Auckland.
By comparison, the percentage of forced sales in the rest of the country has increased from 58.5% in 2007 to 78.1% in the last quarter.
“The supply and demand situation in Auckland means any financially distressed home owners there have a much better chance of selling their home quickly, and at a good price. Consequently, they are much less likely to face a forced sale by the lender,” Mr Donald says.
The figures also show the proportion of ‘Mum and Dad’ property owners (described as individual property owners with only one property) facing mortgagee sales has declined in 2012. ‘Mum and Dad’ property owners accounted for just 15% of all mortgagee sales in the last quarter.
The group under increasing pressure of forced sales in 2012 was individual property owners with between 2-5 properties. In the fourth quarter of 2012, this group comprised 31% of all mortgagee sales, a 6% increase on the previous quarter, making it the single largest group affected.
This trend suggests that a proportion of smaller investors, outside of Auckland, are still under pressure.
The number of sales forced by the larger ‘first tier’ group of major banks increased from 48.5% in 2011, to 52.1% in 2012.
Terralink derives its data from the registration of actual foreclosures.