Some Wellington homeowners face being hundreds of thousands of dollars out of pocket trying to sell up after buying homes at the peak of the market a few years ago.
The latest property data shows average home values in the capital have dropped by as much as 30%, since the heights of January 2022.
Mary Argue shares stories from those who bought at the high and are now reckoning with the low: some taking the hit, and others hanging on for dear life.
'We just need to stop the bleeding'
Wellingtonian Dylan is staring down the barrel of a $300,000 loss. But it's a loss he and his high school friend are resigned to.
When they bought their multi-bedroom 'doer-upper' in Porirua, for just over $700,000 in 2021, the plan was to live in it, and chip away at the renovations, one room at a time.
"But with everything becoming more expensive, that sort of fell away from us," he said, and now they had to "get rid of it as soon as possible".
"It's less than ideal and not really what we had planned, but things change. I currently have a child on the way, which is stressing things out a bit.
"We just need to stop the bleeding."
Dylan said the house, which was in a dismantled state, would be lucky to fetch a bit more than $400,000, which might just cover the mortgage.
"Both of our KiwiSavers were drained to purchase this house and now we are sort of back at square one with minimal KiwiSavers and probably no money to see at the end of it."
He said with each of them now living with partners, they were more fortunate than most - and he was philosophical about it.
"We've made our bed and now we have to sleep in it... there's no point in dwelling on it."
Couple faces mortgage in their 80s
As a creative in a "volatile" industry, Chris and his partner thought they would be renters forever, but when a windfall job came along, all of a sudden they were shopping for their first home in middle-age.
They managed to nab a "fantastic" place by the beach just after property prices peaked in 2022, but were "well-aware that we'd timed it pretty poorly".
"But it was honestly the only chance that we had, so we had to go for it. It took us a long time to find a place that we liked... and within our budget, or what we thought was in our budget."
Chris said a year-and-a-half into their dream home, however, the rug got ripped — he lost his high paying job at the worst time, with interest rates jumping from 3% to 7%.
"[It was] incredibly difficult, incredibly stressful, very tiring - lots and lots of sleepless nights, very tricky mental health wise.
"Losing the job in the way that I did, which was kinda completely out of the blue... it was just, you've got five days that's it."
Chris said it was an emotional rollercoaster contemplating selling their home, but the more than $200,000 drop in value was too much to swallow, and they decided to hold on for dear life while he looked for another job.
"With the circumstances changing so quickly... we just found ourselves kinda... in free-fall essentially.
"My partner has been working her butt off, constantly."
He said they just managed to scape through, but it had come at the cost of their entire retirement savings.
They were down to their "last beans" by the time he found work.
"We've had to extend the length of the mortgage out to the max of course, and now it looks like I'm going to be paying a mortgage into my 80s."
'It just created the frenzy' - real estate agent
Ben Castle who is chief executive of Tommy's Real Estate said the frenzy that took hold in the early Covid years, was likely a one-off, and with the uncertainty driving many New Zealanders home, it was a simple case of supply and demand.
He said people wanting to set themselves up prompted multi-offers on homes and purchases sight unseen, all on a backdrop of stimulus from the Reserve Bank.
"They're just times that you'd never really see ever again and that just created the frenzy. Cheap money... less supply, high demand. It was just the perfect storm for creating a property price boom."
QV has released its latest data, which shows the QV House Price Index fell 0.8% in the three months to the end of August.
In the quarter, Queenstown was up 2.5%, and Hastings 1.7%. But Nelson was down 3.2%, and Wellington 2.4%.
In the capital, the steepest drop was in Wellington City — West, where average values fell 29.9 percent from the peak from $1,442,657 to $1,010,714. Lower Hutt also had significant declines, with average values down nearly $300,000 from $1,032,527 to $741,841 over the same period.
Castle said while the downturn was being felt nationwide, the rise and fall had been particularly acute in Wellington, and believed it was being exacerbated with job losses in the capital - which also reduced the buyers pool.
He said changes in value would attract buyers, and the timing of people buying and selling would dictate whether those changes mattered.
"If people are having to leave Wellington for employment then properties do come to the market, and if you had bought in those big heights post-Covid and are having to sell now — that is a short window and there will be a value decrease.
"If people have owned a house for 15-plus years and are selling now, they'll be doing well."
'You mourn... what could have been'
Tim and Tori said they felt the pressure to buy when the rise in property prices seemed unstoppable, and both felt relief after buying in Lower Hutt with their respective partners.
"We stretched ourselves a little bit to find a property that had a few more bedrooms," Tim said.
He was fairly sanguine about the $200,000 drop in value because they weren't looking to move anytime soon. Despite the drop being a barrier to refinance, on the whole he considered it positive for housing affordability.
For Tori and her husband, in their two bedroom townhouse, it was a different story — the drop in value meant a bigger home was, for now, out of reach.
With a busy toddler, and plans for another, Tori said the priority was a house with a yard and potentially a third bedroom - what they got, was a rude awakening.
"It became really clear quite quickly that we were not going to be able to make back what we paid on our house.
"We initially thought that we'd take about a $50,000 hit on the house, which was a bummer but manageable, and that number just kept creeping up to $80,000 and now over $100,000.
"And my husband and I have said, 'Well we can't have a second baby, if we have to stay here there's just no space'.'"
It was a confronting realisation, she said, to find themselves in good careers, with solid pay, "but it's still not enough to even buy a three-bedroom house" - and she knew they weren't the only ones.
For now, she said they were grateful for the "safe, warm, dry home" they had, but it was hard to let go of the life they'd planned.
"You mourn it a little bit I think, what could have been - having young kids running around — but it's just not the reality."
By Mary Argue of rnz.co.nz
The morning's headlines in 90 seconds, including the hunt for Charlie Kirk’s killer, legal experts weigh in on the Marokopa case, and is the new Sims inspired by New Zealand? (Source: Breakfast)
SHARE ME