Terralink Mortgagee Sales Report
Mortgagee sales drop to a four-year low
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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.
Mortgagee sales trending down nationally in third quarter 2012
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Mortgagee sales are showing a significant downward trend for the first time since the global financial crisis began in 2007.
Figures from location intelligence company Terralink International show there were 516 mortgagee sales from July to September 2012, 15% less than recorded for the previous quarter (April to June 2012).
The total number of forced sales in the nine months to September 2012 was 1,645, with a clear and continued downward trend from May 2012.
Terralink International Managing Director Mike Donald says the latest figures are welcome news and finally show a trend back toward pre 2007 levels.
The number of mortgagee sales still remains stubbornly high in comparison with pre-recession figures. However, we are seeing an easing of volumes nationally with only a handful of regions experiencing any significant increases in the third quarter of 2012.
Manawatu and East Cape stand out as the regions with the largest increases in mortgagee sales when comparing third quarter figures with the previous quarter. Mortgagee sales in the Manawatu increased by 28% and the East Cape region jumped by 137%.
By contrast Taranaki (-38%), Wellington (-25%), Otago (-28%) and the Bay of Plenty (-55%) all experienced marked drops quarter on quarter.
The proportion of “Mum and Dad” property owners (described as individual property owners with only one property) facing mortgagee sales has also dropped slightly from 22% in the second quarter of 2012 to 20% in the third quarter.
The figures also show a continued decrease in the number of sales forced by smaller ‘tier two’ lenders such as finance companies.
At the start of the financial crisis it was this category of lenders forcing a greater percentage of mortgagee sales, but this trend has reversed sharply as we head through the recession and into recovery,” says Mr Donald.
However, for the majority of New Zealand property owners, the latest mortgagee sales data suggests that pressure is finally easing, which is welcome news as we go into the holiday season.
Terralink derives its data from the registration of actual foreclosures.
Tags: Bay of Plenty, East Cape, forced sales, lender, Manawatu, mortgagee, Otago, Taranaki, tier two, wellington
Mortgagee Sales Rise in Second Quarter 2012
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Figures from location intelligence firm Terralink International show there were 605 mortgagee sales from April to June 2012, 81 more than recorded for the first three months of the year.
The total number of forced sales in the six months to June 2012 was 1,129, up from 1,007 for the same period in 2011.
Terralink Managing Director Mike Donald says the latest numbers are consistent with the upward trend that began late in 2011.
“For most of 2011 it looked like the era of record high numbers of forced sales was finally on its way out. Unfortunately, since October 2011 we’ve experienced the opposite.
“When you break it down, 605 mortgagee sales in three months is over 50 every week, or more than seven every single day,” Mr Donald says.
Several regions stand out in the figures for their marked increase in forced sales compared to the first quarter of 2012.
Wellington jumped 56%, while Northland and Bay of Plenty recorded increases of 35% in forced sales. Canterbury came fourth with an increase of 30%.
“Forced sales in all of these regions are up not only from the first quarter of 2012, but also up compared to the second quarter of 2011,” says Mr Donald.
By contrast, property owners in Waikato, Otago, West Coast and Southland experienced a moderate reprieve, with the number of forced sales in those regions decreasing slightly. Auckland remained almost unchanged from the last quarter.
The number of property owners with only one property facing mortgagee sales increased slightly from 21% in the first quarter of 2012, to 22% in the second quarter.
“There’s no good news here for so called ‘mum and dad’ property owners. With properties that are likely to be family homes making up almost a quarter of sales, there’s no sign of economic recovery for ordinary New Zealanders,” Mr Donald says.
Corporates owning more than 11 properties experienced the highest increase in groups facing forced sales, jumping from 16% in the first quarter of 2012 to 25% in the second quarter.
The figures also show an increase in the percentage of forced sales involving tier one lenders, up from 48.5% in 2011 to 52.1% in 2012 June year to date.
“Tier one lenders are our major lending institutions, namely the five big banks. We’re seeing more of these institutions force property sales against individuals, families and corporates.
“Economic growth continues to be sluggish at best, and some commentators are even suggesting the economy may have contracted in the second quarter of 2012. As these conditions continue, I think we’ll see the number of mortgagee sales continue to climb,” Mr Donald says.
Terralink derives its data from the registration of actual foreclosures.
First signs of a turning point in mortgagee sales
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The month of June saw mortgagee sales fall for the first time since the global economic recession began more than. As the chart below shows, the year on year variance in sales has been consistently positive since way back in November 2007.
A total of 202 mortgagee sales were recorded in June, by no means a return to normal levels pre-recession when monthly totals were in the order of 50 per month, but certainly a slowing from the 289 recorded in June last year and the 264 last month. On a seasonally adjusted basis sales in June were down by 24% from the month earlier.
As the chart above shows the sales per month have been keeping pace with, but not greatly exceeding 2009 sales figures since February. In the first 6 months of 2010 there have been 1,231 sales as compared to 1,262 in the same period last year.
Delving deeper into the numbers shows some interesting trends, specifically in regard to regional representation. The chart below shows the percentage of mortgagee sales by region for the first 6 months of 2010 as compared to 2009.
Most noticeable is the lessening of the impact of the Auckland region which has gone from 45% to 37% of sales. Rising sales have been seen in the Waikato (9% to 14%), Northland (6% to 8%) and the Manawatu (3% to 6%). With both Wellington and Canterbury reducing their dominance of mortgagee sales, it would appear that the provinces are suffering a higher degree of mortgagee sales this year than the metropolitan regions.
Tags: mortgagee sales, terralink
Mortgagee property sales show continued pain for heavily indebted owners
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The latest data of mortgagee sales for May show that there continues to be no let up in the pain being suffered by heavily indebted property owners. Earlier in the year there appeared to be signs of an easing and a sense that the worst may have been over. The May figures have now put pay to that.
Data collected and analysed by Terralink show that in the month of May there were 264 registered mortgagee sales, that is up from 246 in April and up 7% from the figure of 247 in May 2009.
The chart below track the monthly sales since the beginning of 2007 – long before the recession which has so significantly driven the situations which have led to this scale of mortgagee sale.
In the period between January and May of this year a total of 1,029 properties have been sold as mortgagee sales – this is up 6%. However what is more significant is the fact that whilst year-on-year mortgagee sales are up 6% across these first 5 months of 2010 the total sales of all properties across NZ is down 10%. This has resulted in mortgagee sales for 2010 now representing over 4% of all sales. In the month of May just over 5% – or put another way 1 in 20 properties sold were mortgagee sales. The chart below tracks this trend as the proportion of all sales as represented by mortgagee sales since the beginning of 2007.
Another alarming trend as highlighted by Terralink in their analysis of the mortgagee sales in May was a significant change in the type of property owners who are being forced to sell. Their was seen to be an increase in the number of mortgagee sales of properties owned by individuals rather than companies or mulitple owners. It appears that more and more of those individuals are losing their only property – and more than likely it’s their family home. In 2009 when the perception was, that the peak of mortgagee sales was being experienced, it now appears that most of those were properties owned by property investors who had over-extended themselves during the property boom. This year the pain seems to have shifted to ordinary New Zealand families.
In May 2009 just under 50% of mortgagee sales were for properties owned by an individual. In the latest data for May 2010 that number has increased to 62%, and one in five of those forced sales was held by an individual who only owned one property.
For clarification mortgagee sales data is derived from legal registrations of actual mortgagee sales as detailed on the legal certificate of title , these numbers may contain sales for a variety of property and land transactions. These transactions occur when the owner of the property has become in default of the terms of the loan from a bank or other lending institution. In most cases such lenders endeavour to come to an agreement with the owner to arrange suitable payment terms, however if these terms are not met or the owner simply cannot manage to make the necessary level of payment the lender will have no alternative but to instigate a mortgagee sale whereby they take possession of the legal title to the property and sell the property to recover the outstanding amount of the loan. If any surplus from the sale is available after paying agents fees and the lender then that will be paid to the property owner.
Tags: foreclosure, mortgagee
Latest data for April mortgagee sales show no signs of a let up
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The month of April saw 246 registered mortgagee sales in NZ, this represents an increase of 44 on the March figure and when adjusted for seasonal factors shows a true increase of 25% for the month; clearly signaling that the pressure of repossession by lenders and the subsequent mortgagee sale of properties continues even though the economy is on the road to recovery. These figures are compiled by Terralink International from data from the Land and Information department statistics of registered title transactions where the seller is the financial institution selling on behalf of the owner or mortgagee in default.
The chart above clearly shows that the level of mortgagee sales in 2010 is tracking at an almost identical rate to the levels of 2009. Whilst from an optimistic perspective it could be judged that the rate of increase has ceased, the absolute level continues to remain high, especially when compared to the long term averages pre-recesssion which is perfectly detailed in the chart below which compares the first 4 months (Jan – April) for each of the past 15 years.
Prior to this recession period of 2009 & 2010, the average monthly level of mortgagee sales across the country was 75 as compared to the average over the recent 24 months of 200 a month.
Examining the regional make up of these sales shows in the table below a decline in Auckland with some significant rises in provincial NZ especially in the Manawatu, Waikato, Northland and the Bay of Plenty.
Tags: mortgagee, mortgagee sales
Mortgagee sales begin to ease
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The latest data of mortgagee sales for the month of February show that the pressure on homeowners struggling under mountains of debt may be easing.
A total of 121 mortgagee sales were registered in the month of February in data released by Terralink International. This total compares to 124 for the same month last year. This is the first time since November 2007 that the year on year change has shown a negative variance. For the past 27 months the picture has looked bleaker every month with some months showing year on year increases of up to 8 times. On a seasonally adjusted basis the month of February showed a 30% decline from January.
As the chart below shows the figures for February are traditionally lower than other months, and it is quite likely that the March sales may well be higher than February has been.
Seen over the course of the past 3 years it is very clear the impact that the economic recession had on distressed homeowners who were forced to accept mortgagee sales as a route to exit the debt burden.
These trends in mortgagee sales naturally track closely the number of listings that come onto the property market as mortgagee sales or mortgagee auctions. Realestate.co.nz provides a detailed tracking of these listings for the past 3 years on a weekly basis. The latest data is that there are currently 291 properties being marketed on the website as mortgagee sales. The chart below track the progressive build of listings over the period of 2008 and then the subsequent decline in number which began around a year ago.
In terms of regional breakdown of the sales of mortgagee properties, the majority of the sales are to be found in the larger regions of Auckland (37%), Waikato (11%), Canterbury and Wellington (7% each). The slightly higher representation of Northland at 9% of all sales in February and Otago (inc Queenstown) at 8% of sales would tend to indicate pressure in holiday homes potentially.
The regional breakdown on February sales is detailed below with the comparative latest 3 month average figures as well as year on year variance.
Tags: foreclosure, mortgagee
Mortgagee sales start new year reflecting continued pressure
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As 2009 ended, so 2010 began with continued high levels of mortgagee sales across NZ. Whilst the number of mortgagee sales recorded in January at 196 was down from the December figure of 252 it was up 30% over the 1st month of 2009.
As commented by Mike Donald (Managing Director of Terralink) “We do often see a drop in mortgagee sales in January, in fact there were fewer mortgagee sales in January than there were December the month before. This may be because January is generally a quiet business month in New Zealand as many of us are on holiday”
He went on to say “I don’t expect to see mortgagee sales returning to pre-recession numbers at all in 2010. I wouldn’t expect to see a major decline on forced sales until at least the middle of 2011,”
The fact is that pre-recession levels of mortgagee sales as seen through the period up until 2008 would only average around 50 per month, so clearly the current levels are upwards of 4 times that level. The chart below tracks comparative months mortgagee sales over the period of the last 3 years.
Tags: foreclosure, mortgagee, terralink
Mortgagee sales close out 2009 at record levels
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Total mortgagee sales for 2009 reached a new record level with 3,024 registered sale transactions where the sale was a mortgagee sale. This annual total was more than 3 times the number of sales in 2008 and more than double the highest prior year (2002).
If for ease of assessment these sales were all of properties then they would represent 4.3% of all sales of residential properties sold in the year.
In terms of trends the monthly figures for 2009 show in the chart below a 3 month decline from the peak month of September which attained a level of 343 sales.
The early months of 2010 will be interesting to observe as the level of listings of mortgagee properties as tracked on realestate.co.nz has been falling for the latter quarter of 2009 and whilst picking up in the January again seems to indicate that the peak certainly in terms of new listings may well be behind us.
Tags: mortgagee
Mortgagee sales slip slightly in October
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Whilst the number of recorded mortgagee sales slipped in October from the high of 343 in September they still remain historically high. A total of 298 sales were recorded in October taking the year to date figure to 2,465 – for the month this represents a 71% increase on the same month last year.
The chart above clearly shows not only the significant levels of sales in each of the months of 2009, but also the fact that this time last year marked the beginning of the steep rise in sales of mortgagee properties. This will provide the opportunity in the coming quarter to assess the year on year comparison more accurately.
The first 10 months of 2009 has seen 2,465 sales – this compares to 964 in the same period of 2008 and just 370 in the first 10 months of 2007 clearly highlighting the significant fall out of the recessionary impact of unemployment and tighter monetary policy and the consequential effect on heavily leveraged investors.
The scale of the rise in mortgagee sales can be best seen in this chart below showing the full history by month since from 2006 when a monthly total of 50 would have seemed high.
The make up of the sales in October comprise a mix of single family homes as multiple property portfolios (more than 5 properties owned by a single entity). The impact of the recession is certainly forecasted by Terralink to continue to see high levels of mortgagee sales into 2010.
Whilst sales levels have continued to rise the number of listings of mortgagee properties on the market has begun to stabilise in the current year with the level of interest as measured by the keyword search of mortgagee showing signs of falling in the last 3 months – these statistics are presented in recent posts on the Unconditional blog on the realestate.co.nz website.
Tags: mortgagee
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