Single mum Tanya Chapple lost her $17 million Queenstown development, has been forced to sign up for the dole, and is among the hundreds of New Zealanders living on the recession edge – never knowing when the receivers will knock on her door to sell her home by mortgagee auction.

Chapple, of New Plymouth, is a former property developer but now she is among the record numbers of "mum and dad" homeowners at risk of losing their houses in forced sales.

Terralink International figures show the number of individuals losing their family home has sky-rocketed, changing the type of owners being forced to sell property after falling behind mortgage payments.

There were 264 mortgagee sales in May this year, up from 246 the previous month, and lower than September last year, when mortgagee sales peaked at 343.

Behind the raw data is a changing face of who is suffering. Last year it was mainly property investors who over-extended themselves, now it's people losing their family home.

"This year the pain has shifted to New Zealand families," said Mike Donald, Terralink International's managing director.

In May last year about half of mortgagee sales were for individual property owners, but that has increased to 62 percent. One in five of those forced sales was for an individual who owned only one property, likely to be the family home.

Owners from Bay of Plenty, Waikato, Manawatu and Taranaki were hit the hardest in May, increasing mortgagee sales by 89 percent to 425 percent on last year.

Chapple, 42, first suffered when her finance dried up following the collapse of Dominion Finance, which went into receivership.

When funding for Chapple's 98-room studio accommodation in Queenstown stopped, so did the remaining building work. She was unable to continue operating it, and lost her sole income when it was taken over by receivers last year. The development was sold by mortgagee tender this year for $4.4 million, significantly short of the $17 million she owes Dominion Finance.

Chapple and five-year-old son Lukas are clinging on to their family home. It was the only property Chapple owned in her trust's name after all four of her investment properties, held by her company, in New Plymouth and Queenstown, were been sold in mortgagee auctions over the past two years.

At times it's a struggle to get by and she lives on tenterhooks, waiting to see what her future will hold.

"I'm waiting for the knock on the door. I'm living on the edge." Her home could be sold by mortgagee auction at any moment if Dominion Finance receivers chose to action it, she said.

The latest Terralink figures come just days after the Reserve Bank lifted the official cash rate by 0.25 percent to 3 percent, and some economists are predicting the forecast recovery will be slower to eventuate.

Battle-weary Chapple is fed up with dealing with lawyers, receivers and real estate agents, but it hasn't got her down. While on the dole, she is working without taking a wage from a property management business, The Force, she has set up, until it can afford to pay her.

THE MILLION-DOLLAR QUESTION

A property academic is asking what could be the million-dollar question: which sale method gets top dollar?

James Young, an Auckland University senior lecturer, is also questioning whether banks are acting in the best interests of home owners by auctioning properties in forced sales, instead of allowing private sales by the homeowners.

Young wants to find out which option is better – auction or private tender – when selling and trying to get top dollar.

Auctions seem the most popular method among more Auckland sellers than anywhere else in the country – 18 percent of the city's 3417 new listings in July, the latest figures from realestate.co.nz show.

That's compared to a 10 percent national average, with 9 percent in Canterbury and just 4 percent in Wellington.

In February, almost one in four new listings were auctioned, a sustained rise from only about 7 percent in 2007.

Alistair Helm, realestate.co.nz chief executive, said the rise in Auckland's auctions could have been caused by buyers wanting action in a quiet, slow market, because an auction has a deadline. Auckland also had the mass that other markets in New Zealand lacked.

Initial research by Young and a post-graduate student showed many real-estate agents used lower starting prices to attract more bidders to an auction. This method led to a higher sale price in the premium market, but failed to achieve a higher price for the bottom end of the market.

Young said it was likely that banks were motivated by a quick sale to get their money back rather than achieving top dollar, so questioned if this was in the best interests of homeowners left out of pocket.

"Auctions may not be the best way to get the maximum price. We want to test whether there is an advantage in selling at auction in New Zealand," Young said. He expected conclusions at the end of the year.