Bay forced house sales soar 800pc | Hawkes Bay News | Local News in Hawkes Bay

Job losses, financial strain on home budgets and "ridiculous" home loans are to blame for a hike in mortgagee sales, which in Hawke's Bay have increased 800 per cent.

People no longer able to service their mortgages have been forced to put their homes on the market and the biggest number of mortgagee sales has been recorded in the Bay, Taranaki and Manawatu.

Property and land information firm Terralink's June 2009 figures showed registered mortgagee sales around the country had tripled compared to the same period last year, to 289, up from 98 in June 2008.

In Havelock North, a large property on Black Barn Rd will go under the hammer in a mortgagee auction on September 25.

It was listed by Tremains real estate and is a partially built, home with a house area of 465sqm and a land area of 1982sqm.

Tremains principal Simon Tremain said the property would come in at the top end of the Hawke's Bay market. He said he could only assume work on the property had stopped because the "payments had stopped coming in" for the builder.

"I think it will move well but it comes down to the price," Mr Tremain said.

"Whoever buys the property needs to take into account the risk factor to be able to sell it and we don't have a lot of buyers in Hawke's Bay at the moment."

Other buyers may want to purchase the property for themselves.

"Then they will get an outstanding home at a good value," Mr Tremain said.

He acknowledged Hawke's Bay's mortgagee figures had jumped significantly - moving from two in June 2008 to 16 in June 2009.

But Mr Tremain said he did not think mortgagee sales would climb any higher in Hawke's Bay but was wary of the situation.

"I think people have extended themselves on the back of a thriving market when they were able to do so but have come into trouble when the market has not increased," Mr Tremain said.

"Lenders are just as responsible as the borrowers. There had been some ridiculous loans to people, individuals and companies."

Terralink managing director Mike Donald said 61 per cent of those who had mortgagee sales owned more than one property.

Business commentators had speculated the worst of the recession was over but the downturn was catching up with those who had overstretched budgets.

"Many New Zealanders aren't out of the woods yet and it will be a long time before they will be," Mr Donald said.

"The job losses keep coming and the culmination of months of financial strain mean many Kiwis have exhausted their options for meeting mortgage payments."