27-07-2009

Property prices expected to fall further despite recent rise.

3news

1. News
2. 2009
3. July

Just when you thought you had the property market figured out, think again. While house prices have recently edged back up, a series of reports out this weekend all warn values will soon come tumbling back down.
    
It puts buyers in a good position, but the flip side is the record number of people forced to sell their homes.

"House prices have crept up a wee bit because of interest rates being low, but I don't think it's going to last," says real estate commentator Olly Newland. "I think we're in a false dawn. Trouble is still coming, we're not out of the woods yet."

Newland says it could be a few years before prices really bottom out, which means there is no harm in buyers holding off - but he says sellers don't have the same luxury.

"If they're under strain they should sell now and perhaps rent until the market stabilises, and they've stabilised themselves. If they can hang on and they don't mind the price fluctuations then fine, they can hang on, but if they're going to sell there's probably no better time than now."

For many, there is no choice in the matter. In May last year there were 88 mortgagee sales over the month - a year later that number has jumped dramatically to 247. Of those people, 81 percent were individuals or companies that owned more than one property, and 19 percent were people forced to sell the family home.

The May figures for mortgagee sales are the highest in 15 years, and there is no sign of that easing anytime soon. Preliminary figures for June have already climbed to an all-time record.

A Terralink property study says property investors who over extended themselves during the boom have been hardest hit. Mr Newland says farmers are also falling on hard times, with a fall in the Fonterra payout and a rise in the dollar. 

"I think that sometime later this year we're going to see a lot of farms going up for mortgagee sale, and they will be the next wave of problems."

Budget advisors say there are many ways homeowners can work with the banks before they lose their house, but more than 40 percent of their clients come to them when it's too late.

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Source: 3news