A record number of property owners are being forced to sell up as banks move to foreclose in mortgagee sales.

New figures published today by Terralink International show there were 524 mortgagee sales in the first three months of this year – the highest first quarter number on record and almost six a day.

Terralink managing director Mike Donald said the figures were "genuine cause for concern" and worse than during the same period in 2010, at the height of the recession.

They indicated the economy was still struggling to pick up and he expected more cash-strapped homeowners to lose their properties in forced sales.

"How many other properties are close to being forced into this situation? We can't answer that question.

"The concern is that while we think we may be through the effects of the recession, it's still proving to be pretty tough out there."

The figures indicated the economic recovery may be a long way off, with banks trying to "drip feed" forced sales to avoid flooding the market with cheap properties and depressing prices.

"In fact, things have never been worse for property owners. I challenge anyone to look at these figures and tell me things are getting better," Mr Donald said.

With 41 foreclosures, Wellington recorded a 71 per cent jump compared with the first quarter of 2011. The number of mortgagee sales in Northland jumped 155 per cent (from 20 to 51) and 153 per cent in Otago (from 15 to 38).

However, some regions, notably Hawke's Bay and Canterbury, experienced a modest decrease during the quarter.

Mr Donald said the one silver lining was that the number of "mum and dad" home owners facing mortgagee sales appeared to be easing.

Banks seemed to be targeting property investors who owned multiple properties.

"The figures indicate this group is under significant pressure, a reflection, perhaps, of reduced equity as property values flatten or decline, and increased pressure on cash flows."

However, BNZ chief economist Tony Alexander said the mortgagee sales figures held little correlation with the buoyant property market.

With a shortage of available housing stock, sales were strong and consents for new dwellings were also up, he said. Interest rates were also at record lows. "Anyone who has paid attention to Terralink data over last four years has been grossly misled."

But Mr Alexander agreed the forced sale of someone's home was traumatic and the record high figures were of concern. Foreclosures represented the most severe cases where property owners could not service their mortgages.

- © Fairfax NZ News