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 per cent of homes bought by first-home buyers between October 2021 and March 2022 have dropped in value from the time of purchase.

About 18 per cent, or 2000 first-home buyers, now have properties that are worth more than 20 per cent 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 per cent are in Auckland, which made up 36 per cent of all sales over that period, and 10.8 per cent in Wellington.

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

CoreLogic head of research Nick Goodall says it's a higher figure than he might have expected.

But he says, while prices have lifted off the bottom, the momentum seen building in the housing market during the latter part of last year has 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 says it should not be a problem for buyers to have lost money on their homes unless there is a change in their circumstances.

He says it's estimated that one per cent of people will 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 says 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 per cent - 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 five and 10 per cent, or another 0.5 percentage points to someone who bought with between 10 per cent and 15 per cent deposit.

Goodall says that could mean that some people are paying even higher interest rates in an environment where rates are already high and other costs are 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 says it would take a customer with a 30-year loan term and 10 per cent deposit just over eight years to build up 20 per cent equity in a property, assuming the price stayed the same.

CoreLogic's Mapping the Market tool data, out on Thursday, shows 221 of 938 suburbs have experienced a drop in values of at least one per cent over the past three months and 10 have had values drop at least five per cent.

Another 253 suburbs have gains of at least one per cent and eight are up by at least five per cent.

CoreLogic's data shows Herne Bay remains 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 says.

"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," says Davidson.

"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."

-RNZ.