Mortgagee property sales around the country for December increased more than 270% on a year ago, as finance companies tightened the screws on loan repayments, boosting the number of forced sales going to market.
The majority of the 15 regions are single-figure mortgagee numbers, but Auckland mortgagee sales are up 21% with 80 sales for December.
Otago is not immune to the problem.
Queenstown notched up increases recently in forced mortgagee sales, and two prominent historic buildings in Princes St, Dunedin, which were both to become high-end hotel developments, are now under the mortgagee hammer.
Multimillion-dollar debts have been called in by South Canterbury Finance and Hanover Finance, the latter struggling under its own debt burden.
Managing director of Property and land information provider Terralink International, Mike McDonald, said in a statement yesterday mortgagee property sales were at an all-time high, with the December total of 191 registered mortgagee sales across the country the highest in 15 years of recording.
There were 191 mortgagee sales last December compared with 66 in December 2007.
Mortgagee house sales last December were at 4.4%, compared with 0.25% in 2007.
Estimating the extent of mortgagee sales has been difficult, as neither Quotable Value nor the Real Estate Institute of New Zealand (REINZ) hold mortgagee data.
However, Mr Donald said the Terralink data was based on legal registrations of actual mortgagee sales.
"It showed that a disproportionate number of mortgagee sales were being driven by second-tier lenders, such as smaller finance companies," he said.
Second-tier lenders' proportion of mortgagee sales is much higher than their overall market share.
"This could indicate that smaller lenders are more distressed or that their loan books are riskier than their big trading bank competitors," he said.
Queenstown is not broken out in the Terralink data, but it is a prime example of finance sector foreclosures, with up to 80% of its forced sale mortgagee market expected to come from the managed apartment and commercial development sector this year.
The REINZ's lakes district spokesman Adrian Snow said last month that more often finance companies were foreclosing on borrowers in arrears or who had defaulted on payments, with prices deflated by about 15%.
While there were no statistics on Wakatipu mortgagee sales, there appeared to be at least 12 for sale at any time, with about 60 on the market last year, and that was expected to increase this year, Queenstown sources said.
Queenstown is the only region in the country where more than 50% of its real estate sales are comprised of apartment and section sales, prompting one economist to note land and apartment properties were exposed to high costs and likely to be more difficult to finance, with subsequent declines in prices.
