As house values record their biggest fall in 14 years and real estate agents see sales decrease, experts explain how the power is returning to buyers. Video / NZ Herald
Luxury agency Ray White Remuera is responding to rising mortgagee sale numbers with one agent now specialising in the distressed end of the market.
Lead agent Cherry Killgour at the Remuera Rd agency will take New Lynn and Lynfield homes to auction soon but is appraising more distressed sales.
"Arising number are coming," said Killgour who has shifted more than 500 homes via mortgagee sales in the last 20 years.
She has listed a New Lynn property to be auctioned as a mortgagee sale on September 7. The 1960s four-bedroom bungalow is on a 1166sq m site zoned mixed housing suburban. Auckland Council has a $1.3m valuation on that place. The financier is Resimac.
She has also listed a Lynfield home, also a mortgagee sale, to be auctioned on August 24. The architecturally-designed brick and tile home is 351 sq m, three bedrooms, has two-car garaging and stands on a 668sq m site. The council has a $2.2m valuation on that place. The financier is Avanti Finance.
Killgour is running a specialist service to help vendors of mortgagee sales and that service works nationally. Appraisals of distressed sales outside Auckland were underway, she said.
Cherry Killgour of Ray White Remuera specialises in mortgagee sales for lenders. Photo / Supplied
"I've been in the industry 28 years and for the last 17 years, I've been very involved in mortgagee sales, representing the mainstream and non-mainstream lenders. During Covid times, mortgage sales were put on hold, with people's circumstances and job situations. The banks had a policy that they couldn't proceed with the mortgagee sales then.
"Now we've got a different stage in the property cycle. Obviously, once the lockdowns ended and people returned to work, sadly these mortgagee sales are on the rise again.
"When an owner is in trouble, I'm contacted," she said of her agency which is usually working for the lender or funder.
"Obviously, the banks are working with the owners. If situations are not resolvable, people are asked to proceed to a mortgagee sale. We work with the families and sell the homes in the best way we possibly can for them," she said.
"This involves mortgagee sales throughout New Zealand. We see an upward trend in demand, now that the funders' policies have been lifted.
"We're busy on a daily basis. We're still appraising new listings. We have two mortgagee sales currently listed but there is quite a number in the wings."
Mortgagee sales must be advertised as such, she said, to make it clear to buyers. No offers will be accepted for the two properties she has listed and they must be sold at auction.
"It's about helping people not to sell a property if we can work our way through it," she said. An empathetic approach to those in the distressing situation was crucial.
Trade Me lists residential and land mortgagee sales in Waitakere, Waihi Beach, Manukau, Hastings, Kaitaia, Grafton, Rakaia, Edendale and Auckland CBD.
A CoreLogic report out in May said such sales were extremely low then.
"Banks' non-performing loan ratios are negligible and mortgagee sales are almost non-existent, apart from a small but rising number of problems in the property development segment where mortgage distress arises, both parties are currently working hard to rectify it without a sale," it said.
But other data out last week indicated values and prices turning down.
House values have recorded their biggest fall in 14 years, putting us back to 2008 and the global financial crisis when it comes to the severity of the retreat, according to Nick Goodall, CoreLogic NZ research head. He said national house values had just recorded their biggest quarterly drop since 2008, when the market was in retreat from the global financial crisis.
CoreLogic's House Price Index fell 0.9 per cent in July but 2.5 per cent in the May-June-July quarter, second only to the 3.4 per cent drop recorded in October 2008, he said.
The information comes after Auckland's largest agency, Barfoot & Thompson, recorded its lowest sales volume for a July in 22 years, as midwinter lulls and rising interest rates take their toll.
Peter Thompson, managing director, said 611 residential properties in Auckland and Northland were sold last month.
In January, the agency sold 801 properties, in February 750, in March 1180, in April 615, in May 782, in June 684 and in July just 611. Average prices fell to $1.23 million last month, down 5.4 per cent on the average price for the previous three months, Barfoot & Thompson said
