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No mysterious spike in mortgagee sales

Posted on: July 5th, 2011 | Filed in Featured, Media commmentary

Mortgagee sales are still a part of the NZ property market. Currently there are 333 properties being marketed in NZ as mortgagee sales. These properties are being marketed by real estate agents on behalf of the mortgagor (in most cases the bank that loaded the money on the house in the first place).

This total though needs to be placed in perspective. There are today 49,782 properties for sale being marketed by real estate agents (excluding sections) across NZ; that means that a mortgagee listed properties represents just 1 in every 150 properties on the market.

The level of mortgagee sales as measured by the number of mortgagee listings on realestate.co.nz has been declining in the long term trend since the peak in early 2009. There has been some small ups and downs, however the chart below certainly highlights the trend over the past 4 years since the data has been collected.

In respect of this trend this chart which tracks year-on-year comparison of listings on a 3 month moving average basis shows when the emergence of mortgagee sales occurred; when the fall off from the peak occurred; and then just how steady this category has become over the past 6 to 9 months with a steady flow of new mortgagee listings coming onto the market matched to ones that have been sold.

It should be noted that the listings data only relates to properties for sale that are marketed as mortgagee sales and excludes sections. At this time there are some 113 sections which are mortgage sales.

This separation of mortgagee property from mortgagee sections in the presented data could be the reason behind the confusion of data presented in the Sunday paper article titled “Mystery spike in mortgagee sales“.

The article cited the number of mortgagee sales listed on realestate.co.nz as of last week at 435. This total would be for both properties and sections. This was then compared to a figure from October of last year of 321 listings; this lead to a supposition that listings were up 37%. (Our office was not unfortunately contacted to share the mortgagee data we track and thereby a misinterpretation occurred).

I believe that the article writer or researcher may have reviewed the article written on this blog back in October last year which detailed the then latest data of 321 listings for mortgagee properties on the market. The comparison is that the number of mortgagee properties on the market today is very nearly identical to that number on the market last October.

The data shows that there in no mysterious spike in mortgagee properties; they are still a part of the property market and from historical review tend to be a lagging indicator of the economic recessionary times that catch out home owners as unemployment and financial hardship hits home.

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