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Have your say: Mortgagee listings up 20% over November; sales hit new high in September
November 23rd, 2009Figures released over the weekend by Terralink International show mortgagee sales rose to a new high of 343 in September from 241 in August. September sales were up from the previous high of 321 in July.
Mortgagee listings have also been rising in recent weeks, according to data supplied to interest.co.nz from realestate.co.nz. There were 379 residential and lifestyle property mortgagee listings on realestate.co.nz at the week beginning November 22, which is the highest since 385 at the week beginning August 2. Listings are up from 303 at the end of October and their recent low of 291 in mid-September.
Over the three weeks of November, mortgagee listings on realestate.co.nz rose by 20% from 315 on November 1.
“The key change in the structure of sales (in September 2009 from a year ago) is the shift from the sales being predominantly in the major centers to provisional NZ,” Terralink said. The chart below shows the regional breakdown of sales in both September 2008 and 2009:
Your view? Will the rise in mortgagee listings over November have any effect on house prices and sales in the final months of the year?
How will the property market finish off 2009 2010?
Tags: House prices, house sales, Mortgagee sales, Property, realestate.co.nz
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November 23rd, 2009 at 10:07 am
hey there… are these figures for actual real mortgagee sales or do they include cleverly advertised distressed vendor sales
also any chance some are being carried over to the next month as they did not hit reserve etc, like is there a duplication within the numbers? they just sound out of wack with what i see going on as far as prices rising and less people in the hot seat…
but we must remember a fool and his money (or the banks) are easily parted, and that there will be cases of home was used for security for a businesses that failed, so along comes the mortgagee sale, the homeowners business failed not the property market itself .
anyway to answer the question i see prices up about 8 – 12% from their previous peak, any more than that is just a bonus (for some), the average dwelling price rising significantly more than the CPI over the same time line….
November 23rd, 2009 at 10:23 am
For Auckland – the latest property press still a bit thin. Not many pages as it used to be. I’ve looking to buy for the last 19 months – hardly any quality listing.
November 23rd, 2009 at 10:38 am
Getting a bit ahead of myself, 2nd question is how will prop market finish off 2009? (not 2010).
November 23rd, 2009 at 10:41 am
To POP,
8-12% increase is certainly a nice figure I would like to see for 2010. However it is not happening as of right now, at least not in Hamilton.
In April this year I almost bought a investment property in a sought for suburb for 350k. Listings on Trademe for good areas in Hamilton have literally doubled since then (Pukete, Flagstaff, Rototuna etc.). A number of houses in that kind, in that same area, are only asking for 329k – 349k at this moment.
I do read a lot of articles recently on the fast increasing property prices for the overall market, I don’t quite understand why Hamilton is a bit different from the rest.
November 23rd, 2009 at 10:41 am
@PoP:
I think I heard a comment on the TV news (sorry – can’t recall which one) which said something along the lines that these were ‘registered’ mortgagee sales.
I am no expert, but I assume that there is a legal process that has to be followed to force a true mortgagee sale, and I guess that these are those, and won’t include the ones where agents imply that it is a mortgagee sale when it isn’t legally so.
If someone has more specific info, please do correct or expand on that.
Thanks,
Alan.
November 23rd, 2009 at 11:04 am
Brien – yes, I’ve also noticed Hamilton’s been very quiet the last couple of months. Tauranga too, according to the stats. Not quite sure what that’s about, though Hamilton is usually quite seasonal with the uni/polytech students & hospital workers, empties out prior to xmas and then booms again in Feb/Mar. The reduced dairy payout probably had an impact too, though this has since lifted a bit.
I suspect we’ve had more people going than coming recently….
November 23rd, 2009 at 11:06 am
Alan,
I used to carry out mortgagee sales for banks (as a solicitor) and haven’t come across the phrase ‘registered mortgagee sale’ before.
A true ‘mortgagee sale’ is a sale where the bank (ie. mortgagee) is the vendor and is exercising its power of sale contained in the mortgage document. The bank can only exercise this power upon default by the borrower (i.e. mortgagor) and once the defaulting borrower has been served with a Property Law Act notice (which gives the borrower 90 days following service to remedy the default).
Mortgagee sales don’t usually occur where the value of the property is greater than the mortgage debt otherwise the owner of the property would simply sell the property on the open market, repay the bank and then pocket the difference (everyone is happy)!
Bank’s can’t instruct or require that owners sell their own property – all banks can do is require that borrowers make all the required payments under the loan agreement and if they don’t then the bank can sell the property itself following expiry of a PLA notice.
November 23rd, 2009 at 11:07 am
@ Brien from Hamilton
I know what you are saying, being in hamilton myself with an investment property i purchased here pre-peak, which went down in value, and now back again. I see the council has issued new CV’s, (1st Septmember 2009) and my two hamilton homes are exactly the same CV as last time around for both of them, two different houses in two different areas.
What’s funny is QV does these guesstimates for the council, but on QV’s own site, the evaluated values for these two homes are significantly higher – something i will no doubt feel compelled point out when i object to the council valuations.
Hamilton is a funny place in itself, with good area and bad in the same suburb (ie chartwell, nice on one side towards rototuna and crap gangster housing between davis corner and five cross roads and the likes – personally speaking i am confident i could get just as much back now for these properties as i paid before the slump, and although i once thought if i can get out i will, even if i lose a bit, well now with the worst of the bad times over for this cycle, i intend to hold on to them longer term, even although i could exit at any stage without loss of money or sleep.
if you are looking, just look carefully as there are some terrible houses for sale. i would recommend looking at rototuna and the better end of chartwell. personally i have a house in huntington and one in chartwell on hukanui rd near westfield shopping centre (own home – no income, plus a four bedroom house returning $420p/wk)
November 23rd, 2009 at 11:22 am
What’s funny is QV does these guesstimates for the council, but on QV’s own site, the evaluated values for these two homes are significantly higher – something i will no doubt feel compelled point out when i object to the council valuations.
Huh? Are you going to try and argue the values up?? Do you want to pay more for your rates?
November 23rd, 2009 at 11:27 am
Hi Folks, It seems to me that the buyers appearing are downsizing and have limited amounts to spend ; so at this stage prices are going to remain pretty static .Keep in mind that buyers are not going to borrow to the hilt as in the past. My area is wairarapa and buyers from out of town are; mainly Auckland and Wellington people who want to buy and still have money left from sale of their property ; I am sure that this applys in other areas as well ;as they are cash buyers this keeps the market pretty stable. You can look at all the statistics produced by various parties and none stand up. Make your own judgements and do not rely on those who endeavour to influence the markets for their own benefit . In closing; any sale is between a willing seller and a willing buyer. and will establish overall prices which will remain stable through into 210.
November 23rd, 2009 at 11:28 am
No QV use the same data for both council and there own site E-value use, and use the same methods for both. Hamilton is the same as a lot of provincial towns, prices have fallen and have not gone up at all.
November 23rd, 2009 at 11:30 am
down 20% in November, another 40% december, come back .0005% in 2010. Then stagnate for 10 years.
November 23rd, 2009 at 11:36 am
well I think the more interesting question is where will the market be end of 2010 rather than end of 09
I’d say we will be about the same end of this year relative to November
As for 2010?
I’d pick another 3-4% rise from here till winter. Then I see a small dip in winter brought on by the seasonal dip, together with reduced immigration and more supply coming on line from the current building buzz
then a small spirng pick up then flattish for a while
November 23rd, 2009 at 11:41 am
@ George – no, what i am saying is there is variances between the two figures from the same valuer…
@IanC – what planet are you on???
@ Brian – i’m like’n ing the last four lines – people would be wise to listen to you…
November 23rd, 2009 at 11:42 am
Good point president of property – I’ve seen advertisements saying things along the lines of “This is not a mortgagee sale but we are willing to meet the market” type of rubbish. Quite boring really.
Brien from Hamilton – is there anything in particular that might be holding up the market in Hamilton? Has Hamilton been hit particularly badly by unemployment at all or something else? Some information from someone on the ground there would be interesting.
November 23rd, 2009 at 11:43 am
jimmy your one trick pony mind always makes me smile
November 23rd, 2009 at 12:23 pm
if,
NZ’s one trick pony economy based on debt based asset inflation would make me laugh if it was not so tragic.
November 23rd, 2009 at 12:40 pm
@ Sam – it’s a bit to do with farmer brown and the Tron is central to everywhere, and in the middle of nowhere…lol
November 23rd, 2009 at 12:57 pm
What’s figure relative to total number of sales? 10%?
November 23rd, 2009 at 1:19 pm
POP and Sam:
It might also do with the immigration — Hamilton is just not the destination for most immigrants, I guess. In hot immigration cities like Auckland, house prices are holding up better.
November 23rd, 2009 at 1:29 pm
I think Auckland prices will continue to creep up in 2010
I’m pretty confident the rentals I bought and fixed for five years in late 2008/early 2009 will be worth more in 5 years time
@Jimmy…good on ya
your pessism is good for a laugh lol
November 23rd, 2009 at 1:52 pm
28-yr-old,
I think there’s a 50/50 chance you’re right, but I wouldn’t rule out house price deflation completely. Most people are convinced that inflation will rear its ugly head (your average punter will argue that inflation is a good thing), but the smart money would suggest it’s not a given. For those very reasons, purchasing property in 08/09 may not have been a smart move. Purchasing the right commodities may have been though.
November 23rd, 2009 at 2:03 pm
fair comment JC, time will tell
November 23rd, 2009 at 2:09 pm
You only need to read the Treasury report to figure out where this housing economy is heading. The summer might keep the property churn going but early next year will see the slide speed up. I expect an exodus of young skilled Kiwi workers and families to cross the ditch for good. Who can blame them. They face a lifetime of low pay and high taxes if they stay with unaffordable property and a govt that couldn’t give a rats rear end. Key will have no option soon but to let the razor gang lose on the state sector budget. The wgtn property mart will take a big hit.
November 23rd, 2009 at 2:34 pm
Everyone,
3 things to bear in mind
1) rising interest rates
2) tax changes – (YES govt and public opinion is finally coming round to accepting the damage the housing market is doing to NZ.)
3) RBNZ policy changes to dampen “hot” money
All these will add further downward pressure to a market already being strangled by low affordability. Well thats what I think anyway. Dont know when it will happen, but given that ownership costs are so much higher than renting (and will get even higher once tax breaks are removed), do we really think its plausible for large enough gains going forward to offset this loss?? I dont. Once people cotton on to this the speculative money goes elsewhere. Our house prices are first and foremost the product of speculation and easy credit – just cos the drops have not been as great as the US does not mean we will not see the same outcome – it might just take longer to get there.
And hey – lets not discount external shocks like hmmm, another financial crisis, foreign lenders removing credit and putting up rates further etc etc etc. The more debt you carry, the more exposed you are. Surely the events of the last 2 years have taught us that???? Well, actually in NZ we have not learned – we are still adding to our debt. For my part, I’m struggling to see the business plan and ipso facto the real value of our housing long term. The circus will end one day.
November 23rd, 2009 at 2:46 pm
Wally i hope you are right, would love a nice (affordable, cough) house here in Wlg.
Dont fancy moving to Dingoland but i must say it is very tempting for this early to mid 30’s Professional Couple with one Sprog in tow.
Atleast the Sprog will be closer to one of the Grandparents.
November 23rd, 2009 at 3:16 pm
Last month in Greytown and Featherston in Wairarapa there were only 4 sales. 3 in Featherston, 1 Greytown.
Masterton and Martinborough much better in comparison.
November 23rd, 2009 at 3:24 pm
G and Wally,
Unfortunately the only option for NZers is either NZ or Aus. These are the last 2 remaining countries with housing bubbles.
November 23rd, 2009 at 3:31 pm
Good luck G but remember, your gain is some buggers loss. I doubt the pension will exist when you get there. I lived on my boat in Evans Bay a while back. Those were the days. Best view at night. No rent. No door knockers. The deep throb of Lady Liz burbling past at midnight.
November 23rd, 2009 at 3:34 pm
Jimmy, me old mucker! I gather you are from Oz (Melbourne, right?). My sis. is hell bent on selling her 4 bm. in Hampton..no probs. there..and buying a 2/3 bm unit on Beaconsfield Parade. Apparently the sellers want 7 1/2 bars! Is that for real? What’s your current take on the market in Oz, as if that asking price is right…talk about NZ being overblown!
November 23rd, 2009 at 4:06 pm
Jimmy, you missed most important point: you do not own house, and obviously can’t afford one!
November 23rd, 2009 at 4:09 pm
Nicholas A,
What is 7 1/5 bars??
Aus is worse than NZ. Like NZ it has appalling govt policy, unlike NZ the govt policy is even worse. we both have obscene immigration levels, tax favoured cap gains, negative gearing credits, emergency low rates, easy foreign investment, NIMBYISM, and a very rabid spruiking industry not monitored by newspapers who gain advertising from them. Aus has all of that, but also has federal AND state housing grants. Melbourne seems to be the worst at the moment. It was in freefall only a year ago before Rudd increased FHOGs, MASSIVELY increased immigration, relaxed foreign investment rules, and the RBA reduced interest rates.
The Aus govt seems even more prepared to sell out households than NZ. I think it reflects a greater degree of corruption and vested interests that permeate this country. Lobbying is a far bigger influence here than in NZ as is organised crime etc.
But hey – at least Rudd saved us from a recession. Now I get to swap affordable housing for a slightly more secure job and little hope of a decent home in a decent area. I am really happy.
In the meantime I rent a nice place valued at 1.1 million for 490 per week. Hmmm – so is there really huge demand??? Certainly there’s a lot of speculative demand if the 2% yields have anything to do with it.
November 23rd, 2009 at 4:12 pm
lyal – I have enough money to buy an average Akld house outright. I choose not to buy because houses are ludicrously overpriced and I can get far better returns elsewhere.
November 23rd, 2009 at 4:16 pm
Thanks a lot ,jimmy. Sorry, my slang for $7.5 million. But I shall pass this on to Sister Sue, as I want her to draw breath before diving straight back in, and value an opinion from ‘on the ground’. Thanks, again.
November 23rd, 2009 at 4:25 pm
i find 7.5 mill hard to believe – someone must be taking the piss. Must have a great view!!
November 23rd, 2009 at 4:29 pm
Also thanks, jimmy. That’s why I asked. I probably got facts askew! Something about next door to the Beaconsfiled Hotel?, Victoria Parade?…but regardless, your info. will suit my converstaion with her tonight. ( I’ll try to listen properly this time!)
November 23rd, 2009 at 5:41 pm
What are the unemployment figures in Hamilton. Here in nelson there has been no real increase, just sunshine wages economy but unemployment rate is officially very low. From National Bank: Nelson “Employment in the region dropped 0.9 percent, causing the region’s unemployment rate to creep-up to a six-year high of 3.2 percent ”
Doesn’t the house market have to get sensible again before it races off again??
November 23rd, 2009 at 5:56 pm
Jimmy, is that right you pay $490 per week for a house worth $1.1 million? Here in Nelson I pay $540 per week for a nice 4 bed house worth $650k. Should I move to Aus???
November 23rd, 2009 at 5:58 pm
Does anyone know if there is any truth to the rumour of the banks sitting on large numbers of pre foreclosures (2-3000) but only wanting to drip feed them into the market to keep prices and hence themselves from collapsing. Despite the US being in freefall, thats exactly what US banks are doing to try and slow down price declines and so they don’t have to show a loss on the loans. Some people over their have stopped paying the mortgage but are getting months of free lodging, some over a year, before the bank commits to a mortgagee or short sale.
November 23rd, 2009 at 6:04 pm
Roger,
depends whether you want to rent or buy I guess. Both are crap yields, but worse where I live. Maybe there is no end to insanity??
stevek
would not surprise me. The real test will come when interest rates rise. Wish Bollard would get on with it. Maybe thats why he’s holding back.
November 23rd, 2009 at 6:22 pm
joke of the day – one news – Bernard Hickey – Property Expert – lol
November 23rd, 2009 at 6:44 pm
Throwing stones in glasshouses PoP
November 23rd, 2009 at 7:19 pm
@ Nicholas Arrand. $7.5 million! I had assumed you meant $750k.
If she went one block back from the beach she could buy a house (not apartment) for 1 million, if she went further along the parade towards Port Melbourne she could get a house for $750-800k.
It’s not that good a view (although I’ve only look from ground level), it a featureless flat bay, with a loud 6 lane road between you and the beach.
The Melbourne market is currently stoopid! The 25k FHOG means the sellers can leverage 4 x 25K, so they can borrow an extra 100k, and those sellers can leverage an extra 400k etc etc etc etc
Good time for her to sell. If I was her, I’d pocket the cash and wait for the FHOG multiplier to peeter out
November 23rd, 2009 at 7:47 pm
Alex,
“The Melbourne market is currently stoopid! ”
Could not agree more.
November 23rd, 2009 at 11:17 pm
what is someone who,s going to pay $165000.00 in interest over the next 5 years classed as?
November 23rd, 2009 at 11:38 pm
POP, I must concur, Bernard Hickey aka the “property expert” – just hilarious!
Didn’t TV3 recently endow BH with the title “economist”?
Maybe the journos just feel too embarrassed to admit they are interviewing a fellow journo! Perhaps a more appropriate title for old BH would be “property whinger”.
Jimmy, are you feeling alright there? I’m getting a little concerned…
November 24th, 2009 at 12:43 am
Sometime I feel New Zealanders at home get caught up in the property propaganda and the unrelenting ethos that many baby boomers in NZ hold that NZ property is the be all and end all of wealth creation.
I would like to ask a few simple questions and see if anyone has any comments. I’m a young Kiwi professional in London. I own a 1 bedroom flat in London close to the city centre – value approx £250k. I am renting the property out and will be netting after annual interest and associated costs – cash of £7k.
I also have a lump sum that I have available to invest elsewhere. Despite the obvious benefits of buying a NZ house to live in and create a home, why would a NZer invest in a property locally that is not going to return income anywhere close to covering interest and associated costs. At a guess if you were to buy an equivalent property in NZ, say around NZ$600k, I’m guessing there would be a hefty shortfall that one would be making up. Do NZ property investors honestly believe that capital gains will continue to spur the benefits of this investment? It is entirely speculative. What if you lose your job and cannot find new employment, how would you intend on funding the interest repayments?
Almost every one of my kiwi professional friends in London hold the identical opinion. Are we not the ones that NZ is trying to encourgae to return home?
Why do New Zealanders obsess with property rather than investing in shares or alternative forms of investment? When the economics catches up with the NZ property market and the approx 85% of private wealth invested in it – there is going to be a whole lot of hurt coming up.
November 24th, 2009 at 1:22 am
” Do NZ property investors honestly believe that capital gains will continue to spur the benefits of this investment?”
In a nutshell, yes. NZers, generally, are convinced that the govt will stop nothing short of maintaining the status quo as it pertains to property. Couple that with a woefully ignorant populace, you have the framework for an irrational market supported by govt meddling and a dysfunctional banking system.
November 24th, 2009 at 7:46 am
This piece says rental is very weak:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10611177
November 24th, 2009 at 8:07 am
This should pump the rents back up:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10611232
November 24th, 2009 at 8:10 am
Mr Barfoot manages many thousands of rental properties and he says rents on the rise:
“Rental activity was also strong, with the average weekly rent achieved by Barfoot & Thompson’s property management division being $403.”
“This is the first time average weekly rents have climbed above the $400 mark, and the increase in average weekly rents over those for the previous month was $19, or 4.9 percent. At the same time last year the average weekly rent was $385.”
“This is the highest increase in rents in a month we have witnessed in 7 years.”
November 24th, 2009 at 8:13 am
UK Kiwi – how do you feel about the fact you now only get approx $2NZ for each 1GBP? It was $3.50NZ not too long ago and as the GBP plummets in tune with the USD it will soon be $1.50NZ for each GBP.
I guess the reality is that you ex pat Kiwis simply will not be able to afford to come back here?
November 24th, 2009 at 8:34 am
UK Kiwi, my advice…you have a zillion times the opportunities over there with property bubbles having imploded. The stupidity here continues because the foolish govt and RBNZ are both porking the market to hold up the bubble to protect the thieving banks. Most of the housing built here between the early 90s and about 04 is in danger of rotting sooner or later. The councils are stealing as much as they can having taken on a heap of staff during the boom and holding on to them, so subdivision charges and fees amount to more than the land is worth. The whole economy is an Ireland/Iceland waiting to be exposed to the world. Stay over there and search out the bargains. You will still earn more in the long run and be the envy of those stuck here paying Key’s fat taxes and giving the rest of your low income to a bank or a landlord.
November 24th, 2009 at 8:57 am
The Bank Managers comment at 8.13am sums up nicely the problem that a debt fuelled property market poses for young New Zealanders, wherever they reside. An exchange rate driven ever higher by capital inflows to support a non productive enterprise is what most export businesses decry.
November 24th, 2009 at 8:58 am
Bank Manager – The currency is obviously far from ideal sitting in my position. I would love to convert some GBP back to NZD but at the current exchange rate I think it would be an unwise move. I don’t proclaim to be a forex expert, but I think long-term it should bring itself back. I know BOE has been pumping out the QE, but NZ is hardly in a fantastic position itself. The e/r is not doing favours for Fonterra or tourism. Not coming back is a reality for a lot of my friends. I will always come back because it is home and I want to live there, but the way things are I am not in a hurry.
Wally – It certainly does have the ring of Ireland/Iceland my thoughts also, but if the worst financial crisis in living memory is not enough to bring things back to reality, I’m not exactly sure what will? A CGT or land-tax? Might slow it down for a year but it’s not going to break that ingrained NZ mantra I wouldn’t have thoughts.
November 24th, 2009 at 9:31 am
ChrisJ: Why do journos interview another journo for an opinion when they could, in the old-fashioned so-last-millenium way, ask the people who have real expertise in the area? Unlike you, I do have respect for Bernard Hickey, but he’s an opinion broker, not the source of all wisdom, and that’s an art in itself. Journos could also stop looking for the definitive silver-bullet answer and accept there are shades of grey to every story. They could even (quelle horreur, it would require more than one phone call!) include more than one point of view in a story.
November 24th, 2009 at 9:44 am
Hey Fellas,
The tone of this discussion is becoming lower and lower and not achieving anything remotely intelligent .
Get your brains up to speed.
November 24th, 2009 at 10:05 am
Thanks, jimmy;alex for yesterdays help.
Got better info. Sue got the figures ( amongst other details) transposed! Should have been $5.7m not $7.5 m ! But peace is regning in the family,again!
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=104904295&f=0&p=10&t=res&ty=&fmt=&header=&cc=&c=61816089&s=vic&snf=ras&tm=1259010138