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Financial pressures still evident as mortgagee listings rise

Posted on: September 25th, 2010 | Filed in Featured, Money Matters

Financial pressureThe latest data of mortgagee sales released last week by Terralink International showed a significant slow down after what has been almost 30 months of unbroken increases month-on-month.

In June a total of 202 transactions were registered as being made by the mortgagor seeking to recover the loan from the mortgagee who had become delinquent on the repayments. (There is no specific details as to the make up of these 202 transactions, ie. how many were of investment properties / developments as opposed to family homes). This total was down from the 289 reported in June 2009 and 24% down on a seasonally adjusted basis from the prior month. The monthly sales chart is shown below:

Mortgagee sales to June 2010

This clear sign of decline may however be a brief rest-bite. The tracking of mortgagee listings which are featured on realestate.co.nz have for a considerable period of time been in decline, however the trend over the past 4 months has shown a U-turn with a steady increase in the number of properties coming onto the market being marketed as mortgagee sales. The total had fallen to just 250 in late May and has risen slowly over the past months to now total 321 as at today.

The chart below tracks the inventory of properties being marketed as mortgagee sales for the past 3 years. It specifically highlights the peak of mortgagee property listings in mid 2008 and subsequent decline and then in the exploded view the rise of recent months.

Mortgagee listings Sep 2010

Article Discussion

  1. andyh says:

    ”From the latest data it looks like the peak of mortgagee listings could be behind us”.

    February 2010.

    Famous last words Alistair. The bullet won’t be dodged a second time.

  2. Alistair Helm Alistair Helm says:

    Andy

    Appreciate you highlighting this – clearly I was wrong. It is never easy to make predictions in the property market.

    Having said that I heard an interesting discussion the other day on the issue of bear markets vs bull markets.

    The point was made that if you are a bear and stick to that conviction regardless you will always be able to say “I told you so” – even if it takes you ten years. However if you are a bull and proclaim that view – firstly people will always say you have an agenda and secondly you can never claim “I told you so” because bull runs are only seen as such in retrospect.

  3. andyh says:

    The latter comment is rather disingenuous Alistair. It is possible (indeed sensible) to be both a bear and a bull at the same time, depending on which asset class one is analysing. One might be very bearish on housing for example, whilst being bullish on precious metals. The key is whether the asset price is over-valued. Housing in NZ is grossly over-valued, and as such it is appropriate to remain bearish on it until it corrects to fair value. Once upon a time housing in NZ was under-valued (or at least fairly valued), at which time it was inappropriate to be bearish on it as an asset class. One’s ‘bearishness’ or otherwise is not really an issue – it is the correct assessment of the assets’ value in time and in relation to future economic developments which counts.

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