First-home buyers in debt: ‘We got a mortgage of $1.32m - just saying it out loud is ridiculous’

- One in eight Auckland first-home buyers took on mortgages of $1m or more this year.

- Centrix data shows 340 first-home buyers in Auckland signed up for these large loans.

- Lower interest rates and increased borrowing capacity have made seven-figure loans more common.

One in eight Auckland first-home buyers in the first three months of this year signed up to a mortgage of $1 million or more.

They weren’t just CEOS. Nurses, teachers and police officers have joined the million-dollar mortgage club, too.

Data from Centrix found that about 330 first-home buyers in Auckland took on a mortgage of $1m or more just to have a home they can call their own.

And a seven-figure mortgage isn’t buying a mansion in Remuera; it’s for a townhouse in suburbs like Te Atatu, Mount Wellington, or Hobsonville.

“I’m seeing households with an average combined income of $200,000 – police officers, teachers and nurses in their late 20s, early to mid-30s – taking out these loans,” Loan Market Central’s Cameron Muggeridge told OneRoof.

A million dollars in Auckland won’t get you a mansion. Photo / Fiona Goodall

Canadian couple Amy Davidson and Eric Lemoine said they never dreamed they’d be in this position.

“We got a mortgage of $1.32m. Just saying it out loud is ridiculous,” said engineer Lemoine.

“It’s more than I ever imagined in my life I would pay for a house ... it’s crazy money. It’s stupid money,” added Davidson, who runs a dog-walking business.

The couple, who used the money to buy a house with some land in rural Pukekohe, said Auckland’s property market was a surprise. “When we went to the bank here and were told we could be pre-approved for over $1m, we looked at our income and what we had saved, and we thought they must have got it wrong,” Lemoine said.

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There’s “no way” he would’ve been given that amount of money in Winnipeg, Canada.

Centrix data shows the number of Auckland first-home buyers taking on a $1m mortgage has almost doubled since 2020.

These people aren’t your typical first-home buyers, though. At 40, they are about four years older than the average property newbie.

Centrix chief operating officer Monika Lacey said it’s sad knowing that’s what it takes for some people to buy their first property.

Across New Zealand, one in 20 first-home buyers took on mortgages of at least $1 million in the first quarter. Some stretched themselves even further: 70 first-home buyers borrowed more than $1.5m, and 20 borrowed more than $2m, the majority in Auckland.

Canadian couple Eric Lemoine and Amy Davidson got a mortgage of $1.32m for a home and some land in rural Pukekohe. “We thought there’d been a mistake.” Photo / OneRoof

Cotality chief property economist Kelvin Davidson told OneRoof that lower interest rates may have helped lift borrowing power, with seven-figure loans becoming more common during the Covid era in Auckland.

"When I was growing up, a million dollars was the most amazing thing ever ....it's a lot of money, but as time goes on, it will become the norm," he said.

But people still face the challenge of building a deposit first.

Davidson and Lemoine describe themselves as “coupon clippers”, buying clothes from op shops, choosing 99-cent chickpeas over $2 brands, house-sitting when they can, and cooking at home most of the time.

That allowed them to save $200,000 over three years. They also had the proceeds from property in Canada to put towards their $330,000 deposit. “It just goes to show if you put your mind to it, what you can achieve,” Lemoine said.

Muggeridge said that kind of discipline, along with KiwiSaver, was helping many first-home buyers, with some using it for up to 80% of their deposit.

“They’re usually upping their contributions to 10% and using it as a forced savings mechanism,” he said.

For Davidson and Lemoine, the sacrifice was worth it, trading travel time for more space. “How can you move to New Zealand and not have sheep? You can’t do that in a townhouse,” Lemoine said.

“Yeah, it was sheep. That’s what did it,” Davidson laughed.

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