THE PRESS - Real estate experts have warned of increased mortgagee sales this year as the housing market cools and interest rates rise. New figures released yesterday showed the housing slowdown continuing this year.  While prices were holding, the rate of house price rises had slowed in most regions, including Canterbury, Quotable Value (QV) figures showed.

QV Christchurch spokesman Richard Kolff said economic factors were working against the housing market. “Sustained pressures such as high fuel and food prices and the Reserve Bank holding up the official cash rate are resulting in a slowdown,” he said. Kolff said property owners with low incomes or mortgages could be struggling as they faced higher interest payments after fixed-term mortgage rates expired. “Already this month we have seen some properties go to mortgagee sale and this is likely to become more prevalent as the year progresses,” Kolff said.

Christchurch real estate agents believed the housing market this year would be flat, but were split on whether the slowdown would lead to a rise in mortgagee sales. The number of mortgagee sales listed on the Trade Me Property website had risen from 12 in 2006, to 29 in December 2007 and 39 at present. Harcourts saleswoman Alison Carter, who specialises in the Sumner and Redcliffs area, expected a rise in mortgagee sales, but said the overall housing market would be flat. Two mortgagee sales were currently being handled by Harcourts in Redcliffs and Mount Pleasant. “I would have thought our area was OK, but we would see more across Christchurch,” she said. “I think a lot of people are highly geared ... the people in mortgagee sales are the people that wheel and deal.”

Real Estate Institute New Zealand president Murray Cleland said the market was leveling, but he had not noticed a rise in mortgagee sales. He warned that mortgagee sales could become more prevalent if interest rates continued to rise: “If there is a rate rise, then people with fixed rates will be concerned.” Cleland said that while sale activity had slowed, the median house price had only slipped by about $7000 to $345,000. “If it dropped again, I would be concerned,” he said.

However, Simes real estate director Dave Sutton said he had not seen any rise it mortgagee activity over the past three years. “It is no different to how it has been over the last two to three years,” he said.

In Christchurch, the QV figures showed the average house price for the three months to January was $367,681, up from $361,912 in the three months to December and $359,891 in the three months to November. However, house price growth in the city slowed, with prices up 6.9 per cent between the three months to January and the same period a year earlier. Previous annual growth figures were 8.2% for the period to December and 9.9% in November.
Growth for the year to January was higher in some other Canterbury districts, with the latest figures being 13.5% for Ashburton, 13.2% for Timaru, 8.8% for the Waimakariri District and 11.8% in Selwyn. Annual price growth figures for South Island districts outside Canterbury included: Tasman 5.7%, Nelson 7.9%, Marlborough 8.3%, Grey 12%, Westland 7.6%, Queenstown Lakes 6.7%, and Dunedin 6.1%.

Further evidence the housing market was slowing came yesterday with the real estate industry announcing more houses than ever on the market. An industry website, featuring 90% of all real estate listings, said there were almost 57,000 residential properties on the site. “At this time last year, there were 42,500 residential properties for sale, so we’re looking at an increase of 35% of homes for sale – a huge increase,” realestate.co.nz chief executive Alistair Helm said.