– An Auckland homeowner has two weeks to sell his Flat Bush house or face a bank sale.
– Many South Auckland homeowners are under financial pressure, selling at a loss or abandoning homes.
– Mortgagee sales are rising, with job losses and dropping property values impacting homeowners who bought post-Covid.
An Auckland homeowner has two weeks to sell his house in Flat Bush, otherwise the bank will do it for him.
He’s one of hundreds of property owners in South Auckland under huge financial pressure. Many are selling at a loss. Some are even abandoning their homes and fleeing to Australia, leaving their debt behind.
OneRoof talked to several agents in South Auckland who are dealing with clients swamped by mortgage debt and looking for an escape or a way to beat the bank. They talked of the toll the squeeze is having on families.
Mortgage brokers say job losses and affordability issues are behind a lot of the unhappiness in the market, and highlight the impact of dropping values on those who bought during the post-Covid boom.
Inside the seven-bedroom home on Koromeke Street. The vendor paid $1.638m for the property in April last year. Photo / Supplied
Homeowners who bought at the peak of the market were in a “sticky position” because their homes were now worth less than what they paid.
Ray White Manukau owner Tom Rawson told OneRoof that he had noticed an uptick in the number of mortgagee sales in his patch.
His agency has about six mortgagee listings, including a seven-bedroom, four-bathroom home at 63 Koromeke Street, in Flat Bush, and a three-bedroom townhouse at 5/10 Becker Drive, in Weymouth.
He said a lot of homeowners facing mortgagee sales did not realise that selling before the bank stepped in was a much better outcome. There was a good chance they’d sell for a better price, which might mean they were in a better position when it came time to settle their loan.
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“It’s generally very embarrassing for the people selling. The bank doesn’t even talk to them before a mortgagee sign goes up outside their house. It can be horrific. So, the ability to beat the bank, working with their own agent, is a good idea.”
The owner of 63 Koromeke Street is doing just that. He bought the property in April last year for $1.638 million, but has come under financial pressure and is now prepared to sell at a $100,000 loss. He has three listings on the go for the house: one is with Harcourts and has the house priced at $1.54m; the second is with Barfoot & Thompson and is for sale by negotiation.
The third listing is with Ray White agents Charlie and Liam Brothers and is on behalf of the mortgagee. It states the property will be sold at auction on August 20, a date the vendor is hoping to avoid.
A three-bedroom property at 9 Waimate Street, in Otara, Auckland, is listed as a “must sell”. The vendor is also trying to avoid a mortgagee sale. Photo / Supplied
A three-bedroom townhouse at 5/10 Becker Drive, in Weymouth, Auckland, is being sold by the mortgagee at auction. Photo / Supplied
Another South Auckland vendor trying to beat the bank is the owner of a three-bedroom cottage at 9 Waimate Street, in Otara. They bought the property for $920,000 in 2022 but were now “in a tough position and must sell”, listing agents Micah Savea and Pat Lapalapa said.
Rawson told OneRoof that at least a third of the 50 properties that Ray White Manukau brought to auction at a special event earlier this month were sold due to financial pressure.
He said those homeowners who had bought properties at the peak of the market ran the risk of selling for a loss because the market had fallen since then.
He said an owner who bought a Hillpark property for just over $1m sixteen months ago resold at auction this month for $850,000 after a consenting issue was uncovered. “All her equity was wiped out,” Rawson said.
“We are in a market where people are selling with genuine intent. They are not selling because they think they are going to get moonbeams for the house. They are selling because they need to. So the intention of people to sell and meet the market has probably never been greater.”
A developer bought this three-bedroom home on Sealord Place, in Auckland’s Manurewa, for $1.29m and has now listed it for $769,000. Photo / Supplied
Barfoot & Thompson agent Parry Singla, who is one of the agents selling 63 Koromeke Street, agreed. People who paid top dollar for houses in South Auckland in 2021 and 2022 were exposed.
One of his listings, a three-bedroom home on Sealord Place, in Manurewa, was bought by a developer in 2021 for $1.29m and was now asking for $769,000.
Singla said the vendor had decided to cut his losses and move on to the next project. “It’s quite bad out there at the moment.”
He said a lot of buyers were “stuck” because even if they did sell, the amount they’d get would not be enough to pay off the home loan.
One of his vendors recently turned down an offer of mid-$800,000s because it was not enough to cover the bank loan. He then stopped paying the mortgage and moved to Australia. The bank then sold the house at a mortgagee sale for around the mid-$700,000s.
Singla knew of others doing the same thing and said they had just decided to leave the debt behind and move overseas for a fresh start, a cheaper house, and better pay.
Cotality chief economist Kelvin Davidson says mortgagee sales are on the rise, but not near a crisis point. Photo / Peter Meecham
Harcourts agent Alex Dunn had also heard of homeowners abandoning their properties and moving overseas. However, most of his listings at the moment were from investors, who were selling because they couldn’t afford the top-ups.
“Most of them are getting rid of investment properties and trying to pay down debt on their owner-occupied place to ease the burn of those repayments,” he told OneRoof.
“When there were all these talks of interest rates coming down, we didn’t anticipate the cost of living increasing so much at the same time.”
He recently appraised a property in South Auckland that a developer had bought for $1.2m and then demolished the house. The bare section had been sitting empty for the last four years, and the recent appraisal valued it at $550,000.
“They wanted to free up capital, but I’m not even sure they can take that much of a hit,” Dunn said.
Tella Mortgages chief executive Andrew Chambers said a lot of the financial unhappiness in the current market was the result of rising unemployment and worsening cost-of-living pressures.
Homeowners who bought at the peak of the market were fine if they were staying put, “but if you need to downsize or you need to sell, it can get a bit tricky”.
Chambers said some clients were coming to them in desperation. “The income no longer stacks up to the level of line they’ve got, or the borrowing is higher than the standard loan-to-value ratio they can get today,” he said.
Those in these tough situations often take what they can get and move back to their parents, or leave New Zealand for better opportunities overseas.
Chambers said mortgagee sales usually only happened after every avenue had been exhausted. The banks only took extreme action once they saw that the money would never be repaid.
Cotality chief economist Kelvin Davidson said while mortgagee sales were on the rise and the highest in six years, levels were nowhere near as bad as they were in the GFC when it peaked at 2600 annually.
There were 235 mortgagee sales for the 12 months ending June 2025, which is the highest in six years, according to Cotality data.
Davidson expected mortgagee sales to continue to rise in the next few months, but he wasn’t “anticipating a mass crisis”.