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Recovery? Mortgagee home sales now 1 in 20
Lois Cairns - Sunday Star Times Last updated 05:00 27/09/2009
CONSUMER CONFIDENCE may have reached a four-year high and the recession may technically be over, but record numbers of Kiwis are still being forced out of their homes because they cannot pay the mortgage.
Figures released exclusively to the Sunday Star-Times show that one in 20 houses sold in July changed hands in a forced sale.
Across the country, 321 mortgagee sales were recorded in July up from the previous month's record of 289.
The figures released by property and land information company Terralink show that in the Auckland region alone, 144 mortgagee sales were recorded 35 more than across the whole of New Zealand during the same month last year.
Already this year, the number of mortgagee sales (1809) has overtaken the number of sales (1304) recorded last year.
Terralink managing director Mike Donald said most of those being forced to sell their homes were investors, although family homes accounted for 18% of the July mortgagee sales. Another trend to emerge from the July figures was the growing proportion of mortgagee sales being driven by the banks rather than finance companies.
"Obviously the second-tier finance companies got hit hard early on. They were forcing the majority.
"They still are forcing the majority but the major banks are... forcing more and more properties into mortgagee sale."
Donald expected the volume of mortgagee sales to remain high for some time.
"The effects of the recession are going to be felt by many for years to come. While we may possibly have hit the peak in terms of actual monthly numbers of mortgagee sales, the numbers continuing will still be at far higher levels than pre-recession. We would expect that to continue for another year or 18 months."
Last week Finance Minister Bill English said the economy was "through the bottom of the trough and is stabilising". His comments came as gross domestic product figures revealed the New Zealand economy had narrowly avoided a sixth straight quarter of contraction (but only just it grew 0.1% in the June quarter) and the Westpac McDermott Miller consumer confidence survey revealed consumer confidence had leapt to a four-year high.
However, economists are warning the recovery will be fragile in its early stages and only gather momentum next year.
BNZ chief economist Tony Alexander said that although the economy was improving, it was not a boom so consumers should not plan on great increases in their incomes.
The housing market though would continue to rebound. According to the Real Estate Institute's latest house-price index, prices have steadied, rising 1% on a monthly basis, 2.2% in the July quarter, and 0.9% in the past 12 months. Sales volumes have also been rising.
A recently released report by economics researcher Infometrics suggested the median house price next June would be 11% up on June this year. In three years, a rise of 24% is expected (17% when adjusted for inflation).
Alexander: "There are four strong elements in play here which easily explain why we've seen prices rise 6% since January. Number one is that we have a wee bit of a shortage of houses in New Zealand and not the huge over-construction of Spain, Ireland, the UK and the US. Number two is we've got the lowest floating
rate borrowing costs in four decades... Thirdly, we have the weakest level of new house construction in four decades. And fourthly, population growth is accelerating with net migration gain now at almost 16,000.
"You put those fundamentals together and it screams prices are edging up. The shortages of listings we have seen emerge from a few months ago backs up the anecdotes of every man and his dog showing up at open homes again."
Westpac senior economist Donna Purdue said that in the June quarter consumers appeared to lack conviction that a recovery was on its way. "Now, there is no doubt. Consumers, regardless of age, income group, gender or region, are convinced that better times lie ahead."
That will be cold comfort, though, for the thousands of New Zealanders who have already lost their homes. In the Wellington region, 26 mortgagee sales were recorded in July (up from 22 in June) while within the Auckland region, the central city had 49 sales, Manukau 32, North Shore, Rodney and Waitakere 17 each, Franklin seven, and Papakura five. Canterbury bucked the trend, dropping from a high of 35 in June to 24 in July. Mortgagee sales in the Waikato region fell from 29 to 25.
http://www.stuff.co.nz/sunday-star-t...es-now-1-in-20
Lois Cairns - Sunday Star Times Last updated 05:00 27/09/2009
CONSUMER CONFIDENCE may have reached a four-year high and the recession may technically be over, but record numbers of Kiwis are still being forced out of their homes because they cannot pay the mortgage.
Figures released exclusively to the Sunday Star-Times show that one in 20 houses sold in July changed hands in a forced sale.
Across the country, 321 mortgagee sales were recorded in July up from the previous month's record of 289.
The figures released by property and land information company Terralink show that in the Auckland region alone, 144 mortgagee sales were recorded 35 more than across the whole of New Zealand during the same month last year.
Already this year, the number of mortgagee sales (1809) has overtaken the number of sales (1304) recorded last year.
Terralink managing director Mike Donald said most of those being forced to sell their homes were investors, although family homes accounted for 18% of the July mortgagee sales. Another trend to emerge from the July figures was the growing proportion of mortgagee sales being driven by the banks rather than finance companies.
"Obviously the second-tier finance companies got hit hard early on. They were forcing the majority.
"They still are forcing the majority but the major banks are... forcing more and more properties into mortgagee sale."
Donald expected the volume of mortgagee sales to remain high for some time.
"The effects of the recession are going to be felt by many for years to come. While we may possibly have hit the peak in terms of actual monthly numbers of mortgagee sales, the numbers continuing will still be at far higher levels than pre-recession. We would expect that to continue for another year or 18 months."
Last week Finance Minister Bill English said the economy was "through the bottom of the trough and is stabilising". His comments came as gross domestic product figures revealed the New Zealand economy had narrowly avoided a sixth straight quarter of contraction (but only just it grew 0.1% in the June quarter) and the Westpac McDermott Miller consumer confidence survey revealed consumer confidence had leapt to a four-year high.
However, economists are warning the recovery will be fragile in its early stages and only gather momentum next year.
BNZ chief economist Tony Alexander said that although the economy was improving, it was not a boom so consumers should not plan on great increases in their incomes.
The housing market though would continue to rebound. According to the Real Estate Institute's latest house-price index, prices have steadied, rising 1% on a monthly basis, 2.2% in the July quarter, and 0.9% in the past 12 months. Sales volumes have also been rising.
A recently released report by economics researcher Infometrics suggested the median house price next June would be 11% up on June this year. In three years, a rise of 24% is expected (17% when adjusted for inflation).
Alexander: "There are four strong elements in play here which easily explain why we've seen prices rise 6% since January. Number one is that we have a wee bit of a shortage of houses in New Zealand and not the huge over-construction of Spain, Ireland, the UK and the US. Number two is we've got the lowest floating
rate borrowing costs in four decades... Thirdly, we have the weakest level of new house construction in four decades. And fourthly, population growth is accelerating with net migration gain now at almost 16,000.
"You put those fundamentals together and it screams prices are edging up. The shortages of listings we have seen emerge from a few months ago backs up the anecdotes of every man and his dog showing up at open homes again."
Westpac senior economist Donna Purdue said that in the June quarter consumers appeared to lack conviction that a recovery was on its way. "Now, there is no doubt. Consumers, regardless of age, income group, gender or region, are convinced that better times lie ahead."
That will be cold comfort, though, for the thousands of New Zealanders who have already lost their homes. In the Wellington region, 26 mortgagee sales were recorded in July (up from 22 in June) while within the Auckland region, the central city had 49 sales, Manukau 32, North Shore, Rodney and Waitakere 17 each, Franklin seven, and Papakura five. Canterbury bucked the trend, dropping from a high of 35 in June to 24 in July. Mortgagee sales in the Waikato region fell from 29 to 25.
http://www.stuff.co.nz/sunday-star-t...es-now-1-in-20
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