10 Coppins Road, Mount Wellington. Photo / Supplied
10 Coppins Road, Mount Wellington. Photo / Supplied
Mortgagee sales fall from 961 to 589 nationally with stronger economic conditions.
Nearly 600 homeowners lost their properties in mortgagee sales during the past 12 months, but foreclosure numbers have plummeted year-on-year.
Figures released exclusively to the Herald by data analysis company CoreLogic show 78 Auckland homes changed hands in distressed sales in the year to September 30, compared with 217 in the previous 12 months.
Nationally, foreclosure numbers fell from 961 to 589 year-on-year - about a quarter of the number seen during the depths of the economic slump in 2009 when several thousand people defaulted on their mortgages.
Waikato recorded the most distressed sales in the past year at 81, followed by Auckland (78), Manawatu/Whanganui (68), Wellington (66), Bay of Plenty (58) Northland (51), Hawkes Bay (35) and Canterbury (33).
Only three of the country's 14 regions saw a rise - Taranaki (21), Tasman/Nelson/Marlborough (26), and West Coast (22) - while Otago was unchanged on 25.
Experts have credited the low rate of forced sales to buoyant economic conditions and low unemployment.
Latest QV data shows the national average house value hit a record $542,277 last month, while in Auckland it has soared to $896,676 - up more than 22 per cent in the past year.
The strong housing market is shutting out many seeking to buy a first home, but means those struggling to make mortgage repayments can often refinance on the back of growing equity in their property and record low interest rates frombanks.
Meanwhile, the Government this week unveiled a long-awaited surplus. And Social Development Ministry figures released yesterday show the number receiving an unemployment benefit has dropped to a seven-year low in Auckland.
But it is rising in 10 other regions as the post-recession recovery goes into reverse in provincial New Zealand in line with falling dairy prices and the prospect of severe droughts.
In August the Herald reported a jump in quarterly foreclosure figures from 95 to 149 as worsening economic conditions and lower dairy payouts hit the rural sector.
Experts warned the number of distressed sales could rise outside Auckland's surging property market as financially strapped homeowners in regional areas defaulted.
There were 147 foreclosures in the past three months, suggesting the figures are starting to plateau.
3/421 Gordons Road, Waiheke Island Auckland. Photo / Supplied
CoreLogic senior research analyst Nick Goodall said low interest rates and favourable economic conditions were the main contributors to foreclosure rates trending down.
"Government and Reserve Bank restrictions will have also played their part, ensuring people aren't overexposed for when circumstances may change.
"The growth in Auckland will also be a large factor in the numbers reducing there, while those small centres will likely have been impacted by something happening to the local economy such as a mine closing on the West Coast affecting employment in the region."
Bankers Association chief executive Kirk Hope said mortgagee sales were always a last resort.
Low foreclosure numbers reflected economic conditions, interest rates and "perhaps a combination of banks lending responsibly and householders taking extra care not to borrow beyond their means".
Asked if distressed sales could jump once interest rates headed north, Mr Kirk said a customer's ability to repay the loan was the key to any lending decision.
He urged anyone facing financial challenges to talk to their bank early.
Mortgagee sales
• 3/421 Gordons Rd, Waiheke Island Three separate properties totalling 4.5ha, including three-bedroom home with loft, rustic split-level farm building and private two-bedroom chalet/cottage with ocean views.
• 18B Melanesia Rd, Kohimarama Leasehold two-bedroom unit with separate lounge and kitchen. Walking distance to beach, shops and cafes.
• 10 Coppins Rd, Mt Wellington "Tired" three-bedroom 1950s brick-and-tile house on 771sq m section. Zoned for Otahuhu College.
