The latest set of data on the property market shows what have consistently been called the “green shoots” of a recovery with stronger sales as reported by Barfoot & Thompson last week and QV today.
However despite these indicators there is still a flow of properties coming onto the market as a consequence of repossessions as the fall out from the recession and growing unemployment.
The recorded sales of mortgagee properties as measured and tracked by Terralink International and reported on Zoodle shows that the peak has yet to be reached with 289 sales in the month of June of this year, up 195% on a year ago.
Mortgagee property listings have been tracked now on the site over the past 18 months and as can be seen from the chart below the peak of the inventory levels would be seen to be behind us. As of today there are just over 300 property listings (excluding sections) on the market being marketed as mortgagee auctions or mortgagee tenders. The peak of the market over the past 18 months has topped over 400 such listings, with as recently as May of this year seeing this peak.
Measuring the number of mortgagee properties actively being marketed at any one time provides one view, however given the urgent need to clear mortgagee property as a function of the lenders wishing to clear the debt liability, the number of new listings coming onto the market does provide a clearer lead-indicator of the health of this segment of the market.
The chart below tracks the number of new mortgagee listings added to the website by month since the beginning of 2007 – measured as a % of all new listings.
As can be seen the flow onto the market continues to rise and given the erratic movement of the past 2 months it is not clear that a peak has been reached as yet. Having said that the fact is that the number of mortgagee properties listed each month still represents less than 2.5% of all new listings or put another way less than 1 property in every 40 is a mortgagee sale.
