Mortgagee sales double
By RUTH LAUGESEN - Sunday Star Times | Sunday, 29 April 2007
Real estate agents say mortgagee sales have doubled in the past year as a small but rising number of debt-laden property investors reach crisis point.
Thursday's interest rate rises, pushing floating mortgage rates to a near decade high of 10.05% and one-year fixed rates as high as 9.05%, are expected to worsen the outlook for over-committed borrowers.
"If mortgagee sales are going up, that can really only mean one thing - people are struggling," said Graham Viall, who oversees national mortgagee sales for Harcourts.
He said Harcourts' mortgagee sales had doubled from about five per month a year ago to about 10 per month now. About one-third of mortgagee listings were now investment properties.
Viall said some investors appeared to feel there would be less capital growth in the property market in future, meaning they were not fighting as hard to hang on to rental properties that were not covering interest and operating costs. Rising interest rates were "not helping".
Luxury properties are also beginning to figure in distress sales. Viall said a property in Parnell, Auckland, recently went for $1 million in a Harcourts' mortgagee sale. In Taupo, a Two Mile Bay home worth $1.2m is up for mortgagee sale.
Other agents reported similar trends. At LJ Hooker, auctioneer Keith Niederer said mortgagee sales in Auckland had more than doubled, from up to two per month a year ago to about five per month. At Ray White's in Auckland, salesman Damian Piggin said he handled two mortgagee sales in Auckland last month, the same as for the whole of last year.
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