House hunters searching for a bargain should think twice before pinning their hopes on mortgagee sales, a Wairarapa real estate agent warns.
"Sometimes they are sold below what could be deemed the market value, but sometimes they are sold at market value," said Property Brokers regional manager Paul Joblin.
"It depends really on the instructions from the mortgagor about what they want to do."
Quarterly figures from information company Terralink show 18 forced sales occurred in Wairarapa between April and June, of those sales 10 were in Carterton.
Twenty-three properties were put up for mortgagee sale during the first half of this year, or more than double the numbers in 2011.
The figures are derived from foreclosure registration data supplied by financial institutions.
Mr Joblin and a Terralink spokesman said the Carterton figures were unusually high and warned they probably included sales from prior periods.
While mortgagee sales had increased during the past few years, they were still a relatively minor part of Wairarapa's real estate market, Mr Joblin said.
One Masterton property was listed for mortgagee sale yesterday on Trade Me, however, there were no listings for the Carterton and South Wairarapa suburbs.
Nationally, forced property sales are taking place at rates similar to those last seen during the peak of the recession in 2009.
In the first half of this year, 1129 mortgagee sales occurred, up from 1007 during the same period last year.
This compared to 1262 foreclosures during the first six months of 2009.
Terralink managing director Mike Donald said with no signs the economy would pick up soon, the number of foreclosures was expected to rise.
"For most of 2011, it looked like the era of record high numbers of forced sales was finally on its way out.
"Unfortunately, since October 2011 we've experienced the opposite," Mr Donald said.
However, provincial New Zealand seemed to be immune from the spiralling number of foreclosures by banks.
Apart from Bay of Plenty and Northland areas, where mortgagee sales jumped 35 per cent between the first and second quarters, most provincial areas had remained relatively stable, Mr Donald said.
Little movement in forced sale numbers in the provinces contrasted with a spike in city areas.
The Wellington region jumped 56 per cent between quarters, he said.
Figures show corporate investors who owned more than 11 properties had suffered the most this year. Forced sales for this group jumped from 16 per cent in the first quarter to 25 per cent in the second quarter. - APNZ
Mortgagee sales for the first half of the year: