When Jennie Moss and her family bought their first home, it seemed like a bargain - but now the drop in the market has wiped out their deposit.
They are among about 2000 first-home buyers whose equity has been erased by falling house prices.
Moss and her family bought a three-bedroom, former state house in Waiwhetū, Lower Hutt in November 2021, at what turned out to be the peak of the housing market.
It was valued at $860,000, but they paid $743,000 with a 20 percent deposit pulled from their savings, KiwiSaver accounts and borrowed from family.
"At the time people were buying similar houses in Lower Hutt for as much as $900,000 in places like Naenae and Taitā."
But then the market started to slow.
A year later, the house was worth $560,000 - and they were due to refix their mortgage as interest rates rose.
"We are now in a situation where the house is worth 19.9 percent less than we paid for it, putting us among the 2000 first-home buyers who have no deposit and no choices but to pay through the roof for a house that is hardly worth it.
"We are stuck. We have no plans to move, however we cannot afford to maintain the house beyond things like getting blinds. We are just managing the weekly repayments which have gone up by 30 percent from $675 to $888 weekly, plus insurance and rates is $1000 weekly."
She said it was only possible to manage because the family's income had increased by 30 percent in the same period. Moss had been on a fixed-term teaching contract but had left for another role.
"We know this in itself is a rarity and our saving grace. If I were still a teacher as I was when we bought the place, we'd be forced to sell by now. We need a new roof and external painting. There is no way we can borrow to do this. We hope the roof doesn't start leaking."
She said they would have to stick it out because there was little option.
"If things got so bad, if interest rates kept going up and there was no relief from any economic levers there could be a time when it felt easier to opt out ... we wouldn't even have a deposit to pay on a rental. It's not really an option.
"It's a feeling of hoping that none of the wheels fall off. We can't afford the roof to give in or the weatherboards to rot out. There's no buffer. If anything drastically goes wrong like that, we will have to be begging and borrowing off family. We cannot get additional lending to maintain this really expensive asset we have."
She said the timing "could not have been worse". But if they had waited to buy, they might not have been able to get a home loan once lending conditions got tougher.
"It's hard not to feel frustrated. The only turnaround for us would be interest rates dropping. We can't do anything about the value of the house, we know that won't shift for years.
"Since we are not planning to go anywhere, we want it to be affordable so we can make it the best house it can be while we're here."
She said her situation illustrated the madness of the movements in the housing market.
"Literally in a matter of a few months in any direction it makes a really vast difference in situation - then and for years and years to come."
The house might cost $600 or $700 a week to rent, she said.
"We are paying way above rental rates. Whereas when we first bought the house it felt like, 'okay we are paying a bit more in insurance and rates but the mortgage is more or less what we had been paying in a rental'. It felt okay. Now it feels a bit ridiculous."
