mortgagee purchasers are not getting bargins at these sales, I think anyone without debt will realise that while interest rates are low, they can go up. Do the sums, one vendors "mortgagee" price may be another buyers burden of life long indebtedness, caveat emptor.

Mark Hubbard Says:
March 3rd, 2009 at 10:11 pm
Actually, "˜those mongrels' are now all in the court system, and I wouldn't trade places with their lives for all the tea in China.

I don't think we can assume how these mongrels are feeling. They must have known they were doing something wrong at the time, and I don't know how they could have slept at night. Possibily being caught is a relief to them. I think it was all about the thrill for them.

Bernard..just wondering IF mortgagee sales are increasing as much as the stats say??
Its my understanding many of the auctions are past in, and even then not sold on further negotiation
How many of the mortgagee sales are repeats? and if so, we can assume that mortgagee sales are increasing, and therefore the repeat listing is multiplying on its self???

This doesnt not do way with the stats showing a large increase trend , but the accuracy of the trend.

I am with steptoe in questioning the accuracy of this data - unless of course you have covered these types of concerns off in another blog / article? Here are some additional questions?

Is it illegal to advertise a property as being a mortgagee sale when it isnt? To what degree are you in fact tracking a marketing / promotional trend as opposed to a genuine increase in the number of mortgagee sales? Whereas in past markets where some mortgagee sales were not advertised as mortgagee sales in order to acheive top dollar are they now being advertised as mortgagee sales? Do the banks actually disclose any numbers re how many defaults / mortgagee sales they generate? Did anyone else note the significant decrease over Dec/Jan period when agents traditionally go on holiday and do not market properies as heavily?

Just not sure if this is the best source of data to deduct anything in relation to the actual mortgagee sales levels. Happy to be convinced otherwise though.

janet Says:
March 4th, 2009 at 7:54 am

"It's funny, Rob. I have know some of "those mongrels" from past areas of business, and you know what? They think NOTHING. There's no remorse; guilt; compassion"¦. nothing, just a blank stare of complete non comprehsnsion on their faces as to what personal havoc they have brought....."

I think there is far too much kneejerk scapegoating of people in the finance system whose main sin is to have assumed exactly the same things as everybody else did, from the politicians to the regulators to the central bankers to the home buyers to the private speculators to the man in the street:

"Property is the only completely safe, cast iron investment. Property prices can NEVER come down......."

I am not sticking up for any of "these mongrels" out of my own biases or position. I personally think the other classes I have named need to take their fair share of the blame, that's all. This has been as much a failure of morals and imagination, society-wide, as of anything else.

Bernard

Simply adding the number of listings that a "˜mortgagee' search delivers on both trademe.co.nz and realestate.co.nz is a very sloppy way of measuring mortgagee listings.

So to prove it I've decided to take a bit of a look at today's listings.

Firstly there are actually a lot more listings on realestate.co.nz than your survey records. Searching under residential for sale on realestate.co.nz excludes both sections for sale and lifestyle blocks, whereas a standard residential search on trademe.co.nz includes both of these categories.

On that basis there were actually 748 residential listings this afternoon on both websites combined. In addition to this there were 53 commercial listings.

But don't get too excited, Bernard, you've still overestimated the number of listings by a long way.

Only 28 out of today's 269 "˜mortgagee' listings on trademe.co.nz were genuine mortgagee listings that were not already advertised on realestate.co.nz.

On top of that there were 54 advertisements that weren't actually mortgagees (these often use the phrase "˜this is not a mortgagee sale').

So there were actually 191 houses for mortgagee, 47 townhouses, 74 apartments, 14 unfinished developments, 136 sections and 27 lifestyle properties.

That's 489 actual residential listings. Of these 92 properties were part of developments where the mortgagee was selling more than one property. These 92 properties represented just 22 developments.

So we can assume that the current mortgagee listings involved no more than 419 mortgages being called in. That's a lot less than the 606 your survey suggests.

A large proportion of sections and unfinished developments as well as many apartments have been on the market for several months and in some cases over a year. I'd say these make up around 150 of the listings (guesstimate only). So there are about 330 active listings (those with current auctions or tenders).

With most dwellings having a reasonably high clearance rate at auction, I'd estimate that there are around 60 to 70 new mortgagees coming to the market each week at present.

So, Bernard, your numbers may not be wildly wrong but this is probably more due to luck rather than genius, since only 10% of trademe.co.nz listings are actually valid and you had been underestimating realestate.co.nz numbers by nearly 50%!

A more interesting number than the roughly 0.5% of listings that you estimate to be mortgagee is that if around 70 mortgagees are selling each week (which would appear to be the case given the relatively high clearance rate among dwelling listings), then as under 4000 properties are selling each month on the general market, mortgagee sales would be making up a rather impressive 7.5% of all sales (that's 1 in 13 house sales)!

With some finance companies and banks taking a cut and run approach to these sales (one auction last week in Christchurch saw a central city property which had genuinely sold for $265,000 in 2007 sell under the hammer for just $132,000) there is an increasing risk that these our economy could be sent into a tailspin by house prices rapidly falling due to the influence of forced sales.

So I don't think too much pleasure can be taken from these mortgagee figures as there are only two solutions to a housing market meltdown "“ central bank sponsored inflation or massive bank write downs and neither of these would be pretty for savers!

Bernard, I wonder if you have considered whether the banking or construction (and other associated retail and manufacturing industries) could survive your 30% house price crash. (You do realise that's almost a 40% decline in real terms!).

A few more stats of interest are:

By region Auckland has 231 mortgagees (52% or 1.63 times the national average), Canterbury 49 (10% or 0.74 x), Northland 45 (9.2% or 2.24x), Bay of Plenty 32 (6.5% or 0.99x), Wellington 30 (6.1% or 0.55x), Waikato 28 (5.7% or 0.56x) and Central/Lakes District 25 (5.1% or 3.77x).

71% of all mortgagees are from Waikato / Bay of Plenty north despite those regions making less than half of the properties in NZ.