“The future we were hoping for at the time was to eventually turn a bit of a profit selling that apartment, get ourselves a slightly bigger one, something that would be better suited to us.”
The deal went through and Pitney, then aged 29, felt good to be paying off his own mortgage instead of someone else’s.
He was also free to redecorate the Auckland property as he wished or hammer in nails to hang pictures with no issues.
He’d done the right thing, he thought, and he was a proud property owner.
That was mid-2021, high on the slopes of the property peak and the view was majestic.
Now it’s 2026 and Pitney is deep in a trough where it’s bleak and clouded.
“It does feel like we stepped into a trap.”
Cameron Pitney bought an Auckland apartment in 2021. Five years later, its value is about 25% lower, leaving him juggling mortgage repayments and an unwanted stint as a landlord. Photo / Mike Scott
Soon after purchasing, Pitney, a senior video producer for the Herald, watched prices that had been bloated by low interest rates and a Covid stimulus plummet.
“We walked in optimistic but thinking we were being cautious and sensible with what we were spending and what we were going to get out of it.
“And knowing that we probably won’t get anything out of this in the future, it’s depressing.”
QV data showed Auckland’s average home value in the July 2026 quarter at $1,173,343 – 23.9% below the high of $1,541,168 in January 2022.
During the Herald interview, Pitney checked in real time the value of his apartment online. The current value was $331,000, a drop of $119,000 or more than 26% from the 2021 purchase price.
“I mean, it’s shattering to feel like we wasted all of this time and money.”
Nationally, QV figures show the average Kiwi home is now worth $898,799, 15.5% below the market’s previous peak in January 2022 – and this figure was boosted by stronger growth over this period in southern markets such as Canterbury, Southland and the West Coast.
Auckland and Wellington – which had an average value of $883,783, 29.7% below its previous peak – are the heavy anchors dragging down property figures.
Since the sharp drop from 2021, property prices have bumbled along for four-and-a-half years, hobbled by a weak economy, higher interest rates and global instability.
According to Herald Business Editor at Large Liam Dann, the current slump was one of the deepest and longest in recent times and might soon become the worst.
In a recent article, Dann adjusted figures for inflation, which showed an even worse picture – Auckland and Wellington were down by about 35.5% and 40% respectively.
“The overall effect of the boom, bust and this long malaise could drive a cultural change in how we look at property investment,” Dann said.
As a first-home buyer, Pitney’s view on property has changed, especially when you mix all those ugly figures and data with real life – he and his partner broke up late last year.
“No one has an easy time in a relationship when prices are shooting up and the cost of living is shooting up and things aren’t looking great financially and you’re not living the life that you were even a few years ago.”
Pitney and his ex are in their 30s. Neither can afford the full mortgage on their own, both are now renting in different homes with flatmates, topping up the costs of their co-owned apartment at “hundreds of dollars a fortnight”.
The whole experience has been devastating to Pitney’s mindset. He describes buying property as a gamble and only possible for the rich.
“Gun to my head, you could not convince me to buy a house again. There is no way I am ever going to make that mistake again.”
QV data shows Auckland’s average home value in the July 2026 quarter was $1,173,343 – 23.9% below the high of $1,541,168 in January 2022. Photo / Mike Scott
Buying a $1.145m home at 20 in 2020
Liam Patten comes across as a young man with a plan who could put it into action.
He started working at 16, left school before finishing Year 12 to become an electrical apprentice, qualified and worked as a sparky for eight years and now at 25 was a commercial site manager for a construction company.
At 20, his mortgage broker father suggested that instead of paying rent, he should buy a house and have tenants help pay his own mortgage – a common manoeuvre to get on the property ladder early in life.
In October 2020, with his parents’ help for the deposit, Patten bought a Pakūranga house for $1.145m, interest-only, with flatmates covering about 60% of the repayments, while he covered the rest.
“It was scary because I was thinking I need to think logically about my bills … I’ve got rates and I’ve got water, power, Wi-Fi. If something goes wrong with the house I need to have something in the bank to service that.”
In his almost six years of home ownership, Patten learnt plenty about unexpected bills, such as when his car broke down.
“I had a house, which is cool, but I can’t drive a house to work.”
He has come to learn flatmates come and go and living with different people takes work. After an initial tranche of mates moved on, Patten converted part of the downstairs garage into his own living area, allowing for some separation and more tenants upstairs.
However, buying high on the slope going up to the 2021 peak had buffeted ambitions for wealth creation.
“At this current moment I wouldn’t be able to get my money back. Probably if I held on for a little while, maybe a few more months, I might be able to make a profit potentially, if the market starts going back up.”
Many home buyers who bought in and around the peak of the property cycle are sitting on a loss or no gain in equity, Valocity senior research analyst Wayne Shum told the Herald.
A third of everyone who bought in 2021 and 2022, and have not sold, are sitting on a paper loss of 10% or more against what they paid, Shum says.
For those who had actually sold, the loss sharpens into reality.
Almost half of 2022 buyers who have since sold booked a loss averaging $60,000.
More than a third of 2021 buyers who sold did the same, averaging a $74,000 loss.
Viewing with a wider lens, the scale of these losses isn’t scarring the wider market, with the Reserve Bank estimating less than 2% of the country’s mortgage debt is in negative equity.
Basically, only a sliver of borrowers owe banks more than what their property is worth.
But for this sliver, including peak buyers, the pain is real. The true damage of these losses is to those hoping to buy again because it reduces the deposit they can muster, Shum says.
“If I paid 20% deposit but I lost 10% value, I don’t really have enough deposit to buy the same house if I want to move somewhere else.”
For example, a 20% deposit on a $500,000 home is $100,000. If the home realises a 10% loss the vendor is down $50,000, meaning they only have half the amount of their original deposit for their next purchase.
It is the antithesis of the Kiwi property dream – descending a rung or two down the property ladder instead of the anticipated climb.
“For a few decades, before 2020, you buy your first home, wait a few years, get married, have kids … move up to the bigger house, maybe in a nicer school zone, maybe just a big house in general or a different town,” Shum says.
“Those first-home buyers now are somewhat stuck where they are if they’ve lost a lot of equity – they don’t have the option to move.”
The long-term
Ask 20-year-old Patten if he’d buy property in 2020, the answer would be yes but just not the same way.
“Instead of investing in one property in Auckland I would have invested in a couple of properties in another town … maybe somewhere like Christchurch or a new build in somewhere like Pōkeno.
“Two houses instead of one house in an expensive area … so then the rent will be contributing massively to the mortgage, rather than you know, 50% or 40%.”
This retrospective strategy is already shaping his next move to sell – at an acceptable price – then buy an investment property elsewhere, likely outside of Auckland. Or he might land-bank in Waikato.
“I would rather think long-term than short-term.
“At the end of the day a house is still an investment and, in the same way you invest in stocks and all of that stuff, fluctuates.
“It’s just whoever’s willing to hold out for the profit.”
Loan Market Highland Park mortgage adviser Michelle Isemonger is seeing peak-era buyers hold on to properties in negative equity rather than sell at a loss. Photo / Mike Scott
According to mortgage adviser Michelle Isemonger, home owners are holding on to search for equity even in times of higher unemployment and increased living costs.
As a partner at Loan Market Highland Park, Isemonger is not seeing a wave of mortgagee sales because banks prefer to support those who are struggling.
“It’s sitting on your hands a little bit, waiting a little bit longer, because I do think the market will recover.”
Looking back, it is easy to see the high peak, but down in a dark trough the bottom is unclear.
Since the plunge of property prices from 2021 to 2023, there have been hints of positive bounce-backs but each time they’ve been snuffed out by various factors – such as the dour economy, and in 2026, the US-Iran conflict, Cotality chief property economist Kelvin Davidson says.
“A wiser economist I used to work for in one of my first few jobs said, ‘Don’t pick a turning point until you’re well past it and you can be sure it was actually a turning point’.”
Even if property prices have bottomed out, any recovery is unlikely to mirror past boom times or match the Kiwi assumption of prices doubling every seven to 10 years, Davidson says.
This is because a number of price drivers have disappeared from the market, he says.
Cotality chief property economist Kelvin Davidson believes the current property downturn hints toward a market where it’s not so much about investment.
Interest rates have “already done their dash in terms of a long-term downwards trend”, tax settings will likely tighten, the housing supply is less restricted.
Also, the shift from one income to two household incomes, the step that helped fuel growth for a generation, has already happened, Davidson says.
“I think there’s probably been some kind of balance restored in terms of affordability.
“People will have different views on whether that’s good or bad, but I think it probably needed to happen.
“It does point, perhaps, to a housing market that looks a little bit different, where it’s not so much about investment, it’s more about owner-occupation, people broadening out their investment choices.”
Davidson admits there is a cohort of buyers who purchased in 2021 and 2022 and are experiencing the most pain in this adjustment.
Even though Cameron Pitney would like to own and also live in his own home, it would take an “economic miracle”. He is more likely to invest in the stock market rather than property. Photo / Mike Scott
And Cameron Pitney knows it.
“Currently, I am completely unable to build any kind of wealth – there’s just no way to do it.
“The best case scenario for the next several years is for me to stay afloat, pay my bills, and keep on trucking until a point where I can start making some kind of decent money.
“When I get to a point where I have the kind of income that I can invest and start putting together long-term savings again that’s going into shares, that’s going into the stock market, it’s not going anywhere near the property market.”
Tomorrow: Investors ‘psychologically scarred’ by housing price crash.
Mike Scott is a senior visual journalist at the New Zealand Herald. His work spans writing, photography and video and has won numerous journalism awards, including Videographer of the Year and Best Documentary. He has worked in media for more than 25 years, producing stories across New Zealand and internationally.
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