Thousands who bought in boom already sold at loss

An estimated 8,333 people bought their homes at the peak of the market. The ‘peak of the market’ is the last quarter of 2021 and the first quarter of 2022. In general, people refer to the peak of the market as ‘if you bought in 2021’.

An estimated 5,000 people who bought homes in Q4 2021 and Q1 2022 have since sold for a lower price, says Cotality chief economist Kelvin Davidson. This number is about 60% of people who bought at the peak of the market and subsequently resold at a loss. That means that 40% of people are still holding, accounting for around 3,333 homeowners.

That percentage includes first-time buyers.

We estimate that around 1,700 first home buyers who purchased in Q4 2021 have now seen their 20% deposit wiped out, and the value of their loan is larger than the value of their house — this is known as negative equity. For many, the harsh reality is facing the question: what happens if my house is worth less than my mortgage NZ, and what options are actually available?

For those holding on until prices rise to or above the peak prices they paid, it could be a long wait.

Cotality’s latest Pain and Gain report revealed 12% of residential sales in the final quarter of 2025 sold for less than the purchase price. That figure rises to 17.4% in Auckland and 15% in Wellington. The median loss recorded was -$50,000.

The $50,000 median loss seems like a very conservative estimate.

What these numbers do not cover is the dreaded ‘C’ word — commission. If you were among the 17.4% of Aucklanders who sold at a median loss of $50,000, you can add another $50,000 in commission. Now you’re looking at a $100,000 loss.

Do you think a real estate agent cares that you sold at a loss?

Bevan Muollo, a senior construction manager, bought a house in Wellington in 2021 for $1.2 million. Five years later, he sold at a loss of $300,000.

Muollo is among 5,000 Kiwis who bought in the housing market boom and subsequently sold at a gross loss.

Jobless and owning no home at 45, Muollo says the mental toll is far worse than losing the money.

Struggling to speak as he holds back tears, Muollo wants to share his story so the thousands of other New Zealanders “under water” like him know that they are not alone.

“Like others at the time, I thought housing was the best investment. Now I’m starting again at 45.”

Although he’s come to terms with swallowing the financial loss, he’s frustrated.

“It’s hard not to be angry… thousands of people’s lives have changed forever.”

Situations like this highlight the real human side behind the search term what happens if my house is worth less than my mortgage NZ — it’s not just numbers, it’s people’s lives, savings, and futures.

We can’t blame the government for everything — that’s a conversation for another day. At some point, responsibility sits with the decisions we make. Markets rise and fall, and risk is always part of the equation.

Having lost his job in Wellington, Muollo relocated to Tauranga for work and now rents a room. It’s a long way from his four-bedroom home in Johnsonville — and from his family.

“Should I stay or should I go?”

It’s the question many homeowners are asking.

Mortgage advisers recommend seeking professional advice. Vijay Gounder, a mortgage adviser at Loan Market Auckland, says he regularly meets people in this exact situation.

“They’ve reached a point where their lending is more than what their property is worth.”

This brings us back again to the same issue: what happens if my house is worth less than my mortgage NZ — because in many cases, selling isn’t simple.

“If they sell now, they may have to cover the shortfall out of their own pocket,” he says.

For example, someone who bought for $1.2m in 2021 may now have a property worth $950,000 — leaving them $250,000 under water. Most Kiwis simply don’t have that kind of cash.

You can’t sell without bringing money to settlement. Banks won’t lend more than the current property value. You’re effectively stuck, watching similar homes sell for far less than what you paid.

An Auckland investor trying to relocate to Queenstown faced this exact issue. They couldn’t sell due to falling values and LVR restrictions across multiple properties.

So the dilemma becomes: sell and move on, or hold and wait?