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Thousands of first-home buyers have deposits wiped out

Published

2 years ago

June 13, 2024

More than 8500 first-home buyers who bought their homes during the market peak have properties that are worth less than they paid for them – and in a significant number of cases, that could be adding to the squeeze on their budgets.

CoreLogic data shows that 81 percent of homes bought by first-home buyers between October 2021 and March 2022 have dropped in value from the time of purchase.

About 18 percent, or 2000 first-home buyers, now have properties that are worth more than 20 percent less than they were bought for, indicating that any equity they had in the deal would probably have been wiped out.

Of those that are worth less than they were purchased for, 42 percent are in Auckland, which made up 36 percent of all sales over that period, and 10.8 percent in Wellington.

Of those that are still more than 20 percent below their purchase price, two-thirds are in Auckland and 18.8 percent in Wellington.

CoreLogic head of research Nick Goodall said it was a higher figure than he might have expected.

But he said, while prices had lifted off the bottom, the momentum seen building in the housing market during the latter part of last year had petered away.

“We haven’t seen much growth from the trough of the market, there hasn’t been much opportunity for those properties to gain back lost value.”

Goodall said it should not be a problem for buyers to have lost money on their homes unless there was a change in their circumstances.

He said it was estimated that 1 percent of people would go through something that might force them to move, each year – such as a death in the family, divorce or job loss.

“It will affect relatively few people but that’s scant consolation if you’re going through this.”

He said most people would have bought with the intention to hold for a longer-term.

“As long as they’re not in a position where they can’t keep up with the mortgage they should be able to ride it out and wait for value growth. The lessons learned from previous cycles are that it can take upwards of five to seven, if not longer, years to get back to the peak. If you really did buy at the peak it could take some time to get back to that position.”

But for some buyers, the value drop could make their mortgages harder to service for longer.

Banks usually apply a low-equity fee or margin to borrowing when a borrower has a deposit of less than 20 percent – and also often do not allow them to access cheaper “special” interest rates.

A margin might add another 0.75 percentage points to an interest rate if someone had bought with a deposit of between 5 and 10 percent, or another 0.5 percentage points to someone who bought with between 10 percent and 15 percent deposit.

Goodall said that could mean that some people were paying even higher interest rates in an environment where rates were already high and other costs were squeezing people’s incomes.

When the market was hot, many borrowers took out loans with these margins expecting to be able to have the properties revalued and the margin removed before long.

“If you were hoping to get rid of that and now you have to pay it longer while you’re paying greater costs on everything else it will continue to sting your income. You could have higher interest rates on top of higher insurance bills and rates, it could get to the point when even though you’re not forced to sell in a mortgagee sale and there’s no change in your circumstances it might get to the point where it’s costing too much.”

Kiwibank said it would take a customer with a 30-year loan term and 10 percent deposit just over eight years to build up 20 percent equity in a property assuming the price stayed the same.

CoreLogic’s Mapping the Market tool data, out on Thursday, showed 221 of 938 suburbs had experienced a drop in values of at least 1 percent over the past three months and 10 had had values drop at least 5 percent.

Another 253 suburbs had gains of at least 1 percent and eight were up by at least 5 percent.

CoreLogic’s data showed Herne Bay remained the most expensive suburb in the country with a median value of $3.41 million.

“The more recent loss of momentum tends to reflect continued affordability pressures and high mortgage rates, the rise in listings on the market, and a turning point for unemployment,” Goodall’s colleague Kelvin Davidson said.

“Tax cuts and looser LVR rules may not boost activity or prices very much in an environment where mortgage rates remain high, although the removal of first-home grants and the introduction of DTI limits might not necessarily undermine the market greatly either,” Davidson said.

“All in all, the latest suburb-level figures confirm the market’s recent loss of momentum, and 2024 remains on track to be a pretty subdued year.”

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Police say person who fired gun at officers still at large

Published

3 days ago

November 12, 2026

News Staff

Police say a person who fired a gun at officers in Napier is still at large.

Eastern District Commander Superintendent Joel Lamb said Police tried to stop a vehicle in the Pirimai Area at about 10pm on Tuesday.

He said someone in the back seat pointed what was presumed to be a firearm at officers pursuing the vehicle.

“Staff have then heard two distinct gunshots as the firearm was discharged.

“Fortunately, neither of our officers were injured, and the patrol vehicle did not sustain any damage.”

He said hours later, the vehicle was seen travelling north on the Waikato Expressway towards Auckland.

Police seized the vehicle at an address in Manurewa, but they had not found the alleged offender.

Lamb said people who lived at the Manurewa address were engaging with Police.

He said Eastern District and Counties Manukau Police were making enquiries.

“Presenting a firearm at a Police officer is a serious escalation that puts our staff and the wider community at risk. This behaviour is entirely unacceptable.

“We are taking this incident extremely seriously and will be pursuing all lines of enquiry to locate the offender and hold them accountable.”

Police asked anyone who witnessed the incident to contact Police on 105 or online using the reference number 261111/3764.

Information could also be provided anonymously via Crime Stoppers on 0800 555 111.

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Latest News

New Zealand sides named for RLWC finals

Published

4 days ago

November 11, 2026

News Staff

The players tasked with ending Australia’s Rugby League World Cup dominance have been named.

The Kiwis and Kiwi Ferns have announced their squads for this Sunday’s World Cup finals in Brisbane.

Both sides are chasing their first titles since 2008, and both are looking to end their opponents run of three crowns in a row.

“Our Kiwi Ferns have been so dominant in years gone by, and we want to bring dominance back to this jersey, so I think it will be a case of who wants it more,” said co-captain Georgia Hale of the impending clash.

The Kiwis get a major boost for the final as they welcome back Ronaldo Mulitalo after he served a one-match ban for a high tackle against Fiji Bati.

Mulitalo replaces Charnze Nicoll-Klokstad, who moves to the six-man bench, which again includes utility Te Maire Martin, middle forwards Naufahu Whyte, Erin Clark and Xavier Willison plus fullback Keano Kini.

Loose forward Joseph Tapine will make his 30th Test appearance in a familiar pack again, including second-rowers Isaiah Papali’i and Briton Nikora, and props James Fisher-Harris and Moses Leota.

Winger Jamayne Isaako is on the cusp of claiming the New Zealand record for most Test points.

His five goals against Tonga lifted his career points tally to 225 – level with Shaun Johnson – while centre Casey McLean goes into the final with 16 tries in just eight Tests.

Fisher-Harris will again captain the team.

Fullback Ponga said the goal of the group was clear.

“We have high expectations around what we want to achieve, and obviously winning a world Cup is one of them.”

Meanwhile, Ricky Henry has selected a settled side to take on the Jillaroos, led by their lethal centre combination of Stacey Waaka and Mele Hufanga.

Veteran Apii Nicholls takes the number one jersey, Leianne Tufuga and Mackenzie Wiki on the wings.

Henry has stuck with his halves pairing of Chantay Kiria-Ratu and Raecene McGregor with Alexis Tauaneai, Georgia Hale and Otesa Pule up front.

Rounding out the starting pack is Shaniece Monschau, Kaiyah Atai, and Angelina Teakaraanga-Katoa.

“We have been building well throughout the tournament; we understand the Jillaroos side, and will give it our all to make New Zealand proud this weekend,” said Henry.

RLWC Finals:

Kiwi Ferns vs Jillaroos- 6.10pm

Kiwis vs Kangaroos – 9.35pm

Sunday November 15

Suncorp Stadium, Brisbane

Live blog updates on RNZ

Kiwi Ferns:

1. Apii Nicholls 2. Leianne Tufuga 3. Mele Hufanga 4. Stacey Waaka 5. Mackenzie Wiki 6. Chantay Kiria-Ratu 7. Raecene McGregor 8. Alexis Tauaneai 9. Georgia Hale 10. Otesa Pule 11. Shaniece Monschau 12. Kaiyah Atai 13. Angelina Teakaraanga-Katoa.

Interchange: 14. Ashleigh Quinlan 15. Annessa Biddle 16. Shannon Mato 17. Ivana Lauitiiti.

Reserves: 18. Brooke Anderson 19. Zahara Temara 20. Brianna Clark 21. Abigail Roache 22. Tenika Willison.

Kiwis:

1. Kalyn Ponga, 2. Jamayne Isaako, 3. Dane Gagai, 4. Casey McLean, 5. Ronaldo Mulitalo, 6. Kodi Nikorima, 7. Jahrome Hughes, 8. James Fisher-Harris (c), 9. Jeremy Marshall-King, 10. Moses Leota, 11. Isaiah Papali’i, 12. Briton Nikora, 13. Joseph Tapine (v/c).

Interchange: 14. Te Maire Martin, 15. Naufahu Whyte, 16. Erin Clark, 17. Xavier Willison.

Reserves: 18. Keano Kini, 19. Phoenix Crossland, 20. Charnze Nicoll-Klokstad, 21. Scott Sorensen, 22. Leo Thompson.

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Latest News

Parliamentary Service working on extra chairs and offices for increased number of MPs

Published

4 days ago

November 11, 2026

News Staff

The chief executive of the Parliamentary Service is confident there will be enough room to accommodate the increased number of MPs and their staff coming into Parliament.

On current numbers, up to 131 MPs could be sitting in the Chamber following the election, brought on by a record overhang result.

Clerk of the House of Representatives Dr David Wilson told the Spinoff that currently the debating chamber had enough chairs to seat 124 MPs – including the Speaker of the House – and work was being done to accommodate more by altering the seating arrangement.

In a statement, Parliamentary Service chief executive Rafael Gonzalez-Montero said planning for a larger Parliament had been going for “some time”.

“Now that the election results have confirmed an increase to the number of members we are looking at several options.

“We are confident we will be able to accommodate all members within the Chamber.”

Chief Executive of the Parliamentary Service Rafael Gonzalez-Montero appears before select committee. — Parliamentary Service chief executive Rafael Gonzalez-Montero.

VNP / Phil Smith

Gonzalez-Montero said office accommodation for members and their staff would be “stretched” for a short time, but the new Members’ Building was only a few months away from “practical completion”.

That building – located behind Parliament – was due to be ready to occupy in April next year and had capacity to accommodate around 30 backbench MPs.

“All members should be in fit-for-purpose accommodation from that point,” Gonzalez-Montero said.

Following the 2023 election, 123 MPs sat in the Chamber – a record number at the time. That decreased to 122 following the resignation of National MP Judith Collins.

Collins held the seat of Papakura and stepped down in May and Parliament voted against holding a by-election because it was too close to the election.

The election result also meant high-ranking National Party MPs like Chris Bishop, Paul Goldsmith, Nicola Willis and Gerry Brownlee – Speaker of the House and an MP for 30 years – would likely not make it back into Parliament.

Only resigning or retiring MPs were permitted to give a valedictory speech meaning none of them would get the chance to give a valedictory statement.

Asked if their would be special allowances for valedictories, Wilson said in a statement that normally only MPs were allowed to speak in the House but the House could suspend its own rules or temporarily alter them.

“It could do so to allow former members to address the House.”

Wilson said no such arrangements could be made until the next Parliament opened and members sworn in.

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