The three boys share a bedroom and, each autumn, a single birthday party.

They play budget-friendly organised sport – one code each – and have fun at home with mum and dad instead of
expensive trips away.

And while she’d love to give their little home a fresh lick of paint, mum Kelly Gander says, the weekly grocery bill’s up $100 on a year ago, so that ain’t happening anytime soon.

This is life for our newest homeowners as inflation hits 7.2 per cent, and Reserve Bank governor Adrian Orr talks openly about engineering a recession to pull it back down.

But despite the economic headwinds, Gander wants everyone to know, they’re “very, very happy”.

“Our lives have changed for the positive”, the 34-year-old says, 17 months after she and husband Blair bought their first home, a 3-bedroom doer upper in Maungakaramea, 23km south-west of Whangārei.

“We live in a really awesome community, and my oldest is thriving at school. We absolutely made the right decision, and we’ve never looked back.”

The executive assistant was one of eight aspiring homeowners who spoke to the Weekend Herald in mid-2021 about trying to buy a first home, amid the uncertainty of the Covid-19 pandemic and in an overheated property market where ever-rising house prices towered over stagnating incomes.

Seven have spoken again for this story, although four – fearing the easy judgment sometimes levelled at their cohort – do so using their first names only.

“It’s heartbreaking”, Gander told the Weekend Herald in June 2021, as she and Blair teetered on abandoning their life-long home of Auckland because it had become “unaffordable”.

Then – elation – an offer accepted, and a settlement date that fortuitously came three days before a Devonport tradie tested positive for Covid-19′s Delta variant in August 2021, sparking a nationwide lockdown.

It’s a welcome anchorage on life’s chart, but while home ownership promises stability, certainty is more elusive.

No longer can a landlord capsize their kids’ lives, but economic currents can also drag the ability to pay for that privilege beyond reach.

Fortunately, one of the couple’s first home ownership decisions proved prescient – they ignored their mortgage broker’s prediction interest rates would go negative.

Instead, they split the 80 per cent loan for their $867,000 home into 3, 4 and 5 year fixed interest rate terms of between 3.24 and 3.79 per cent, Gander says.

Both parents work – Gander part-time from home in a bedroom-turned-office; her husband full-time outside the home.

But despite a healthy double income, the mortgage still guzzles 40 per cent of what they earn.

And there’s those rising living costs like that inflated grocery bill.

“Then there’s daycare going up a little, and petrol, your power bill and gas bottles

“Add it all up and suddenly you’re looking at a couple of hundred bucks extra each week.”

And they still worry about their eventual, staggered return to the fixed interest rate market.

“Our first renewal comes up in two years and we’re panicking about that, because if they keep going up at the rate they’re going at the moment, well, goodness knows?

“We were stress tested on 7 per cent. It’s already close to 7 now [in December]. If they got up near 8, 9 per cent, there’s no way we could service that. Unless our salaries increase, which for most people doesn’t seem to be happening.”

Still, no regrets, Gander says, even if the worst – a mortgagee sale – lies ahead. But no easy surrender, either.

“We would’ve still done it, because I think it was the right move for us at the right time, and we’ll do everything to make it work – we won’t go down without a fight.

“Because we just love this life and we love our house.”

‘Blank canvas’ transformed, future uncertain

Fight like hell for the Kiwi home ownership dream only to potentially boomerang back into the rent trap. That’s not how it’s supposed to work.

But the great house price-interest rate switcheroo of 2022 saw average property values fall 5.4 per cent nationally – to just above $1 million – in the year to November, according to OneRoof-Valocity’s house value index, as interest rates for the popular one-year option almost doubled to nudge 6 per cent.

And climbing.

For the newly arrived to home ownership, or the over-leveraged, the changing fortunes of property in New Zealand threatens to turn dreams to despair, with an equity-slashing 20.3 per cent fall in property values nationally since November 2020, according to the index.

Teacher-come-111-dispatcher Samantha Julian turned the key on her dream just over a year ago, beating an Auckland investor with a bid of $560,000 – her limit – to buy a 3-bedroom cross-lease home in Christchurch’s Hornby.

The single 34-year-old taught by day and nannied by night and on weekends, to save $120,000 over three years to find some longed-for housing security for her family.

“My mum has been a single parent, a widow since I was a baby, and she could never afford to buy a home. Neither can my brother, being on his own.

“A first home for me is a shared home for the three of us.”

It’s been a good year in her first home, made possible only after she ditched Wellington’s then-sizzling market and moved south.

She’s got to know her neighbours, planted vege and berry patches, and traded countless flower cuttings with friends to flood her “blank canvas” with yellow, pink, purple and red.

The cornflowers have been her biggest success, with scattered seeds of the spindly annual popping up “like wildflowers in spring”, Julian says.

“I just wanted to make it colourful and inviting. It’s like a little oasis. Mum’s loved being a part of the garden as well, she’s taught me a lot.”

But an interest rate rise of almost 3 per cent last month has hiked her mortgage payments $340 a fortnight, on a home that’s barely risen in value.

“Hindsight’s always a wonderful thing, you wish you fixed for longer. There wasn’t a lot of discussion around people I worked with … lawyers and brokers, to say that it could go up a lot so I never really thought about that.”

She never had someone to give her financial advice and has a message for those in a similar situation.

“Find more people to talk to and do more research.”

But Julian, who’s in the process of joining the police, has some power over her situation.

She lives frugally, and can do overtime shifts or rent out a room.

“I’d really love to hang on to the property, it just depends on the future.”

‘If rates go up to 9 per cent … that’s me out’

Fellow late 2021 first-home buyer Shelley is also facing a rates shock, with her interest rate jumping just over 2 per cent to 5.25 per cent, and she’s now considering adding to her $92,000 annual income with weekend retail or fruit-picking shifts.

“I don’t really want to though.”

The 50-year-old paid $700,000 for a 3-bedroom, 1980s home in northwest Auckland’s Parakai just over a year ago, when her mortgage of $2500 a month – even with a 0.3 per cent low equity penalty – matched her old rent.

Her first home only had an oven and bench in the kitchen and wasn’t in her preferred area, but was still a haven of hope for someone who’d struggled financially for years after leaving an abusive relationship and raising a child alone.

“As soon as my daughter – because she was my biggest money-sucker – moved out of home five years ago I solidly saved everything and lived off toast,” Shelley says, with pay rises, bonuses and her KiwiSaver boosting her deposit to $105,000.

But Auckland property values dropped by 8.8 per cent in the year to November, and Shelley’s still stuck with a low equity interest rate penalty of 0.3 per cent.

She regrets taking her mortgage broker’s advice to fix her interest rates for a year.

“[They said] by that time my equity would increase and I’d be able to get rid of [the penalty]. But the market went a bit pear-shaped.”

She’s still managing to pay a couple of hundred dollars extra each month, but major renovations are on hold, Shelley says.

Learning from YouTube tutorials, she’s managed to paint half the interior, and replace some flooring and all the doors.

“I’ve always wanted a house, it was my dream. I just didn’t think I’d be buying a house that needs so much work, and not having money to do a lot of that work.

“But if rates go up to 9 per cent, yeah, that’s me out … I’d have to sell, or go interest-only until it sorts itself out.”

If she hangs on, great, but she now accepts she won’t clear her mortgage before retirement.

“Fortunately uh… my God,” she says, sighing. “Before I retire my mum might pass away. Even mum’s said it to me. She goes, ‘Don’t worry, you’ll be fine, because by the time I go you’ll have an extra $300,000′. And I’m like, ‘That’s nice, but I’d rather still have my mum’.

“It’s sad we’ve come to that. Usually when you got money from your parents it was so you could buy a second home, not so you could just survive.”

The great wealth transfer

Shelley and her mum will likely be part of the greatest wealth transfer in history, with late business commentator Brian Gaynor writing in BusinessDesk in 2021 that Kiwis aged 58+ are expected to transfer, or donate to charity, $1.15 trillion in wealth over the next 20 years.

In the United States, that figure soars to $110.17 trillion, almost three times the superpower’s estimated 2022 GDP.

Signs of this transfer, calculated from individual and household wealth surveys by the Reserve Bank and Stats NZ, can already be seen, with parents and grandparents partly funding their kids and grandkids into houses, Gaynor wrote.

“This will create greater inequality as children of less well-to-do families will find it much more difficult to fund the purchase of their first home.”

Harley Neville and his younger brother are among those on the first home dash without help from the bank of mum and dad, now or ever.

“We grew up in a single-income household and that single income was our mum’s domestic purposes benefit”, Neville says.

“If our relatives die we incur funeral costs, but no inheritance.”

The brothers want to secure their financial future so began looking for an investment property to buy together in their childhood city of Dunedin in February 2020.

Almost three years, and several disillusionment and pandemic-related breaks later, they’re still chasing the dream.

“The cash part of our deposit is growing but the KiwiSaver and stock market part is shrinking, so we’re kind of treading water.

“And with interest rates going up at the same time house prices seem to be going down, it doesn’t seem like necessarily the right time to buy either.”

The pair, who are 17 years apart in age, have a combined income of about $140,000, along with $55,000 cash savings, $60,000 in shares, and $50,000 and $30,000 respectively in their KiwiSaver accounts – only available if they move into the home for at least six months.

Auckland-based Neville, a film and TV freelancer and co-host of The Guy and Harley Podcast, is prepared to move to Dunedin short-term, and the pair are also looking in Christchurch, where his brother is an engineer in the army.

Auckland’s the obvious option, but the average house value of $1.38m is a monumental barrier, the 39-year-old says.

“I don’t wanna buy a million dollar s***hole in West or South Auckland, or way out in the boonies.”

The pair plan to resume their house hunt in April, when their savings come off term deposit.

He’s not too worried by experts’ predictions fixed interest rates could climb above 7 per cent in the next year, and that a recession – potentially hiking unemployment – is expected.

“All that leaves you a little less motivated, but I do understand you’ve got to pull the trigger at some point … just get in, hold on and see what happens.”

‘The system and culture just don’t allow people to get ahead’

A year ago, Christchurch health professional Robyn’s hope for a place to call her own turned to despair as offers on several homes fell short.

The 43-year-old’s dream of home ownership remains just that, along with her longtime wish to adopt a dog – one that “I can take for walks, and is loyal”.

Falling house values prompted her bank to cut $50,000 off her budget, dropping her purchase limit to $500,000.

It’s a setback, but she doesn’t feel beaten – far from it.

“[In 2021] I was in a panic, there was a big rush … I thought, ‘I’ve gotta do it’. Now things have quieted down, and while I still want to buy a home, it’s not that same kind of feeling as last year, when it takes over all your thinking.”

Her life has changed in more poignant ways since those gloomy house-hunting days of 2021.

Late that year she suffered a heart problem, and then concussion and a back injury in a car crash.

“There were times when I thought I was gonna lose everything. When you come out the other side and you haven’t, it gives you a greater respect for what you do have.”

Fellow house hunter Tim enjoyed a more stable year, but won’t be joining the property-owning class anytime soon either.

The single 44-year-old’s plans to buy in Wellington have been on hold since 2021, and while his KiwiSaver’s untouched, he dipped into his cash deposit savings to travel to Europe and Australia last year.

There was also a slight pay rise, to $82,000, but unexpected lulls between flatmates further eroded his savings.

“I had about $9000 or $10,000, that’s down to $4000 or $5000 … there’s no point in saving money if I’m never going to be able to afford a house.”

But his desire for a home of his own – he wants to live alone, close to the central city and in a building with no body corporate fees or earthquake issues – isn’t dead, it’s “just on pause”, he says.

Average property values in Wellington skyrocketed in 2021, but fell 16.7 per cent to $917,000 in the year to November.

The profit sellers once made now goes to banks, thanks to higher interest rates, but either way first-home buyers remain shut out, Tim says.

“It’s capitalism and economics … and the banks will quite happily say it’s our right to do it. But it doesn’t mean it’s right to do it, and it doesn’t mean anyone can actually buy a house.

“The system and culture just don’t allow people to get ahead.”

‘It was all worth it’

Robyn and Tim are far from alone in shying away from the property market.

A Real Estate Institute of New Zealand survey of 555 real estate agents by independent economist Tony Alexander in November found a net 39 per cent were seeing fewer people at auctions compared to a month earlier, with a net 48 per cent reporting the same at open homes.

Among those pulling back, agents say, are first-home buyers.

It was no better earlier in the year, as tighter finance, labour shortages, supply chain headaches and already rising interest rates combined to peg first-home buyer purchases in the March quarter to their lowest percentage of overall sales since 2014, according to CoreLogic NZ data.

But not all were out.

As our littlest folk hunted hidden Easter goodies a few weeks later, Aucklander Kayla and her husband had their hands on a reward more enduring.

After more than 18 months of weekends lost to open homes and stress levels spiked by out-of-reach auctions and failed offers, they were considering moving to Christchurch or Australia, Kayla says.

But on the eve of the Easter long weekend, they made a pre-auction offer on a 120sq m, two-storey home with four bedrooms, two bathrooms and a basement in the beach suburb of Manly.

With a final bid of $1.05m at the accelerated auction, a patch of prized North Auckland land big enough for a trampoline, a deck and a spa pool, and the 1970s-era house that sat on it, was theirs.

Nine months on, home ownership still feels pretty good, Kayla says.

“My husband is so happy. He got to a point where he just didn’t think it was gonna happen for us.

“When we started … we were looking at houses for $750,000. By the time we bought, we were up to a million dollars.”

When the home is yours, life feels different, and that goes beyond the gate, Kayla says.

Trips to the beach with the kids, aged 3, 6 and 10, always include time picking up rubbish.

“This is our home. I feel more part of the community.”

Even starting the long journey to owning their home outright brought joy, and relief as they realised the decision to lock in three years of interest rates at 4.99 per cent had been wise.

“I was excited about paying the mortgage, which sounds stupid when it’s over $2000 a fortnight, but it was that sense of accomplishment.”

The household income servicing their more than $800,000 mortgage has also, helpfully, risen from $180,000 to $260,000 last year.

The over-used adjective “blessed” is both corny and appropriate, Kayla says.

“I don’t like saying it, but to a certain point I do feel like it all was meant to happen, and all the turmoil and suffering and everything else we went through – the utter despair – is all gone, and it was all worth it.”