The front page article of the Herald on Sunday proclaims – “Mortgagee Mansions – rich pickings as the wealthy are forced to sell”- well it certainly grabbed my attention this morning as I am sure it did for countless other folk as they sat down to learn yet more about the fall out of the global credit crunch.
The article upon closer reading seems to be full of “shock and awe” but equally a lot of people saying “we don’t have that statistic or this statistic” – yet despite that the article claims that the fall out in the housing market is being felt more noticeably than many thought at the top end of the market.
So with the benefit of the fact that this website is the most comprehensive real estate listings website in NZ (currently with over 108,000 listings of which 79,000 are homes for sale – a clear 35% more listings than any other website) I thought it would be of benefit to look into the current 250 mortgagee listings on the site to see how close to the truth the article in the paper is. Of the 250 listings – 206 are homes, 13 are lifestyle properties and 31 are sections.
Firstly Bernard Hickey’s comment in the article that the most pain is being felt in Auckland is absolutely right, with more than 50% of all mortgagee properties being found in Auckland. Although to put it in perspective there are 106 which as a segment of the current 16,181 homes for sale in the region is actually only 0.7% or 1 home in every 153 homes.
Excluding Auckland the remaining 100 homes are spilt across the rest of the country in a fairly even distribution – the South Island has 36 or 0.3% of all homes for sale; and the balance of the North Island excluding Auckland has 64 at the same 0.3% of all homes for sale.
The only areas of the country to come close to the Auckland level are Bay of Plenty, Canterbury, Central North Island and Manawatu / Whanganui – all showing around 0.4%.
In terms of pricing the facts paint a vastly different picture to that of the newspaper article. There are just 10 mortgagee properties being marketed with an indicative price over $1m. As a proportion of the 4,538 properties currently for sale across the country with this level of asking price they represent just 0.2%. On the other hand the average price of all mortgagee properties on the site is $378,000 – well below the average price as reported by REINZ for April which was $427,000 (note this is the average price, not the median price).
Clearly the bulk of the properties subject to mortgagee sale today are in the sub $400,000 price bracket – 158 of them representing 0.9% of all properties in this price bracket.
So with the benefit of a little more research the newspapers could have provided a little more depth of information to assist their readers be better informed about the property market – but then as they say – why let the truth get in the way of a good story – especially when it can grab headlines to sell newspapers!