'Buy a few investment properties. The rent will pay the mortgage, then later you can enjoy the capital gain'.
Well - it seemed a good idea at the time.
But the current recession is bringing things home to roost for many who speculated on property in the years leading up
to 2007.
Unprecedented numbers of mortgagee sales are the result of New Zealanders who over-extended themselves during the property boom by buying multiple investment properties, according to new figures.
The data, released today by Terralink International, showed 247 registered mortgagee sales in May, compared to 88 for the same time last year.
Terralink managing director Mike Donald said the numbers were a sign that stress in the property market was not letting up.
"The numbers of mortgagee sales in May is on a par with the previous month, but the number is still at a level unseen in the 15 years we've been recording these figures.
"All indications are that increasing numbers of New Zealanders will lose their properties via mortgagee sales. Early predictions for mortgagee sales in June show the level will reach a new record."
Mr Donald said those being hardest hit by mortgagee sales were individuals and corporate property investors.
"Many New Zealanders took advantage of the property boom by buying a number of properties, but now that times are tough servicing multiple mortgages is becoming impossible for increasing numbers of New Zealanders."
Of the total mortgagee sales, 81 per cent of them were for individuals or companies, who owned more than one property.
"In contrast, only 19 per cent were for properties owned by an individual who had only one property. That would be what we would think of as the family home," Mr Donald said.
The North Island accounted for 75 per cent of the mortgagee sales with 44 per cent in Auckland alone.
However, parts of the South Island had been hit hard in May, with Otago experiencing a 60 per cent increase and Canterbury a 42 per cent increase on the previous month's mortgagee sales.
- NZPA
