Rebuild jobs help cut forced sales tally

LIZ MCDONALD
Last updated 05:00 09/06/2012

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Jobs created by the earthquake recovery appear to have buffered Canterbury from a nationwide surge in mortgagee sales.

In the first three months of the year New Zealand saw a record number of mort-gagee sales – where lenders sell homes because owners have defaulted on pay-ments.

But forced sales in Canterbury have fallen from 36 in the first quarter of last year to 26 mortgagee sales in the same period this year.

The region accounted for just 4.9 per cent of the country's mortgagee sales, down from 8.4 per cent a year ago.

The figures were tallied by land information company Terralink International.

Christchurch economist Robin Clements, of UBS, said extra jobs generated by the earthquake recovery have had a protective effect on Canterbury which has spread across the South Island.

"The improvement is understandable because of the strength of the job market in Canterbury – you just have to look at the job ads.

"If you're employed you're able to service your debt. That's what the banks worry about – whether people have a job and can pay the mortgage," Clements said.

Statistics New Zealand's latest household labour force survey found the number unemployed in Canterbury has fallen by 3000 in a year from 21,800 to 18,800, a drop of 17 per cent. Jobs for males increased the most, especially in the construction sector.

Nationally the number of mortgagee sales in the first quarter of the year reached a record 524, up from 424 a year ago.

Most of the increases were in North Island regions, with Northland recording the biggest jump.

Queenstown was the only South Island region to have recorded a significant rise.

However, a smaller percentage of the sales than last year involved "mum and dad" homeowners, rather than properties owned by landlords or institutions. Homeowner mortgagee sales made up about a fifth of the total.

Terralink managing director Mike Donald said an average of six mortgagee sales a day were held in New Zealand.

This was a concern as it was more than at the height of the recession, he said.

"If there's a silver lining anywhere in the figures, it's the drop in the proportion of individuals with a single property facing mortgagee sales," Donald said.

"On the other hand, there has been a large increase in the number of mortgagee sales for individuals, considered to be property investors, who own multiple properties."

This group was under significant pressure, perhaps with reduced equity as property values flatten or decline and cashflows decrease, he said.

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"I challenge anyone to look at these figures and tell me things are getting better for Kiwi property owners."

The figures also show a marked upturn in the number of the "big five" banks forcing mortgagee sales.

This has risen from 36 per cent of the total in 2009 to 55 per cent this year.

- South Canterbury

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