Multiple house owners hit hard by mortgagee sales

NZPA | Monday July 27 2009 – 07:55am

 Unprecedented numbers of mortgage sales are the result of New Zealanders who over-extended themselves during the property boom by buying multiple investment properties, according to new figures.

The data, released today by Terralink International, showed 247 registered mortgagee sales in May, compared to 88 for the same time last year.

Terralink managing director Mike Donald said the numbers were a sign that stress in the property market was not letting up. “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.” Mr Donald said those being hardest hit by mortgagee sales were individuals and corporate property investors.

“Many New Zealanders took advantage of the property boom by buying a number of properties, but now that times are tough servicing multiple mortgages is becoming impossible for increasing numbers of New Zealanders.” Of the total mortgagee sales, 81 percent of them were for individuals or companies, who owned more than one property.

“In contrast, only 19 percent were for properties owned by an individual who had only one property. That would be what we would think of as the family home,” Mr Donald said.

The North Island accounted for 75 percent of the mortgagee sales with 44 percent in Auckland alone. However, parts of the South Island had been hit hard in May, with Otago experiencing a 60 percent increase and Canterbury a 42 percent increase on the previous month’s mortgagee sales.