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  1. #1
    Join Date
    Sep 2003
    High up above and deep down under

    Default Hanover forces mortgagee apartment sales

    Hanover forces mortgagee apartment sales
    By GREG NINNESS - Sunday Star Times | Sunday, 26 August 2007

    Hanover Finance has flexed its muscle, forcing a mortgagee sale of the unsold units in an Auckland apartment development.

    The six unsold apartments in the Harbour Green complex at 11 Union St in the CBD were auctioned by City Sales last week.

    The units ranged in size from 26sq m to 78sq m. Several unsold carparks in the building were also offered at the same time giving buyers the option of buying apartments with or without car parks.

    All of the apartments were owned by Winning Investments Ltd, which according to Companies Office records is owned by North Shore residents Lin Zhong, Hong Wu Zhang and Hong Shen Zhong.

    Hanover Group chief executive Sam Stubbs said the company had forced the sale of the units because the developer was being being tardy in selling them, possibly hoping to hold out for a higher price.

    "He wanted to hold on and string it out and collateralise the interest payments and we forced his hand because it's in the interests of debenture holders and the trustee would expect us to do that anyway," Stubbs said.

    "So rather than keep rolling it over and put ourselves into a weaker longterm position, in those situations we'll move in."

    Hanover was the second mortgagee on the apartments behind the Bank of New Zealand, though Hanover had loaned more money against them than the BNZ.

    Hanover has been a major player in the Auckland apartment market, often as a second tier lender. Its accounts show that it had $325 million in loans backed by second mortgages on its books at December 31, 2006 out of a total $604m lent against commercial and residential property developments.

    There was good buyer interest in the units when they went under the hammer last week, mainly from investors rather than owner occupiers, and there were often four or five bidders competing for each.

    However, in line with the overall market for investment apartments, most sold for less than their council valuations.

    "We'd usually set the minimum so that we got our money back. The fact that they sold for below their valuations doesn't surprise me in this market," Stubbs said.

    Last edited by cube; 26-08-2007 at 02:35 PM.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  2. #2


    I would presume that these finance companies are under pressure from their investors asking how safe their money is.

    Some may be already withdrawing their money.

    This would put alot pressure on other apartments currently being built with second tier lender money.

  3. #3
    Join Date
    Jun 2005


    This will most likely keep occurring for a while yet.

    The finance companies will need to cull there rubbish loans very fast to stay alive. Investors will be reluctant to invest with them if they have poor portfolios. Especially after the last few collapses of finance companies.

  4. #4
    Join Date
    Jun 2005


    Interesting times ahead then I say, we may end up buying an appartment in Auckland but only to live in from time to time, we are considering a move at some stage in the next few years and if Waiheke wins the vote we will also buy an appartment in Auckland for those times when we dont make it back in time to cross on the ferry. Mind you by the time we buy that the market could well have done another cycle.

    I want at least one car park with mine and a 3 bed appartment at least so not after these cheap little ones. Still I feel if in the right spot they could give good cashflow. Just not the sort of thing I normally buy to hold.

  5. #5
    Join Date
    Jun 2007


    Anybody know what the prices were per each plus square metre?

  6. #6
    Join Date
    May 2005

    Default prices were

    2bed 2parks 320k rented @29kpa to body corp (managers )
    2bed 1park 231k
    1bed 107k 35 k for optional carpark
    2bed 196k 35 k for optional carpark
    1bed 6 parks passed in
    Last edited by cantthinkofanickname; 27-08-2007 at 09:36 AM. Reason: more info added
    I'm sick of the crumbs i want a piece of that pie


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