It's no wonder that, according to the last Census, fewer than 30 per cent of those aged under 40 owned or partly-owned the property they were living in.
According to the Roost home loan affordability series for interest.co.nz, it takes 46 per cent of a median income of a person in the 25-29 age group to pay the mortgage on a lower quartile priced house - one that is affordable for families when both adults work - bought last month, up from 44.3 per cent in February.
Although the figure is significantly lower than the highest point - 74.6 per cent in June 2007 - it's a daunting prospect to think almost half a wage is going on mortgage payments.
Yet banks report a surge in interest from would-be first home buyers.
Kiwibank says the market represented by first home buyers has increased to about 15 per cent of overall mortgage business.
ASB reports a "significantly higher" number of loan applications from first-time buyers this year compared to the previous two.
Real Estate Institute of New Zealand chief executive Helen O'Sullivan says the organisation's monthly survey shows first-time buyers are back in the market.
"There are a range of factors: interest rates are low, there's more confidence around the job market, people are getting a little tired of living with mum and dad, prices are holding and particularly in places like Auckland, the rental market is getting tighter."
For many it might also be a case of now or never. And there might be a rise in mortgagee sales as some of those entering the property market discover - belatedly - that they've overstretched themselves financially.
But it could just be that more people are adjusting their expectations. And, the experts agree, that's a significant step in getting onto the property ladder. Combine realism with research, and perhaps a bit of financial help, and owning that first home could be closer than you think.
My house, my castle
Whether you're buying an investment property or home will dictate your approach to the buying process.
If it's the former, are you buying where lots of people want to rent? If the latter, what's right for you?
For some, one might lead to the other. It might make sense to buy an investment property in an area you can afford rather than hoping for a home in an area you can't. You can sell the investment property later or use it as equity when buying your own home.
Alternatively, you can take several steps to reach your dream home, upgrading a little with each move. If you dream of a villa in Mt Eden, you might have to make do with a brick and tile in Mt Albert for a couple of years first.
"Work out what you need now. You don't have to buy the house you're going to be in for the rest of your life - you don't need a three-bedroom house in Herne Bay," says New Zealand Property Investors Federation president Andrew King.
Hot property
Investing in your property education and getting to know the market could be crucial. And the more time you can spare the better, even if it means a dozen open homes every weekend.
Debbie Roberts, who runs coaching programme Property Apprentice in Auckland with husband Paul and their business partner Ken Hight says buyers should become a market expert in their chosen area, know the type of property they are looking for and how much they can afford to borrow.
As with every profession, some real estate agents are better than others. Ms Roberts recommends taking the time to build rapport with those you like - and always remember they're working for the vendor rather than the buyer. Once they have a good understanding of what you're looking for, a good agent may contact you first when the right property comes on the market.
Gareth Berry did it the hard way. After four months, more than 200 open homes and the disappointment of being outbid at multiple auctions, the 34-year-old technology worker, no longer has to drag his three-year-old daughter around the city every weekend, despite paying $880,000 for a Mt Albert house with a capital value of $630,000.
"Persevere, do your homework and keep trying and you'll get there," he says.
There are other ways to maximise your chances of finding a competitively-priced property in the overheated market.
Look for vendors who need to sell up, and quickly. Has there been a relationship break-up or death? Have they got a new job in another city or do they misunderstand the market and are selling at below market value? Remember - if you don't take advantage, someone else will.
Location, location, location
Vanity addressing was all the rage at the height of the boom - and still is among some agents.
Well it works the other way too. If you want to buy in a particular suburb, consider a property a couple of streets into another to save a sizeable sum.
Homes in the sought-after Auckland Grammar zone cost significantly more than those a few streets away outside it, says Andrew King. If you've not got children, or will compromise on their school, widen your horizons.
Catherine Sutton and her husband Brent have been looking for a three-bedroom home in Auckland priced at up to $650,000 for a month.
High on their list of priorities are a good primary school zone, public transport links and a backyard for their future children.
But they've become more flexible after realising they won't get everything they're looking for.
"We're beginning to consider suburbs like the Sunnynook edge of Forrest Hill and parts of Glenfield (on the North Shore) - although we had quite a wide catchment to begin with," said Mrs Sutton.
In Wellington's upmarket Khandallah, 4km north-east of the city centre, a newly-renovated four-bedroom home recently sold for $725,000. A few streets away a slightly smaller home closer to schools and shops sold for $610,000.
In Mt Maunganui two three-bedroom, two-bathroom properties 1km apart sold at significantly different prices because of their proximity to beach, cafes and shops.
The first, one block from the water, went for $975,000 and the second, four blocks further back, for $585,000.
Eight months ago 30-year-old health worker Tien-Huey Lim was months into a search for an investment property in Auckland's Mt Wellington, with little luck.
After compromising on location, and extending the area she was looking in, she paid $615,000 for a block of three units in Mangere in September.
DIY rescue
Unless you've got plenty of time on your hands or a bent for renovations, DIY can seem too much like hard work.
But if you're willing to live with a little bit of mess and spend perhaps a little more cash you could speed your way onto the property ladder and perhaps fast track your way to your dream suburb.
Rachel Grunwell and husband Damien Buckley spent almost two years restoring a dilapidated 100-year-old Mt Eden villa to its former glory.
Although in disastrous condition, the new property was close to work and good schools, north-facing and leak-free.
By getting their hands dirty and doing as much of the work themselves as possible, they were able to revamp the house within their $200,000 budget, which included, lifting carpet and creating polished floors, restoring the character fireplaces, adding a new modern kitchen and redecorating.
Auction house
No one likes revelling in someone else's misfortune, but mortgagee auctions can yield monster bargains.
The number of mortgagee sales has reached record levels, according to banking ombudsman Deborah Battell, with many paying the price for borrowing too much during the last property boom.
At a recent mortgagee sale in Wellington, a house and two sections in the sought-after inner-city suburb of Roseneath valued at more than $1.4 million went for $558,000.
An Albany home with a valuation of $780,000 sold for $600,000 and a portfolio of four Auckland properties valued at $2.1m sold for $1.5m.
But a word of caution. Helen O'Sullivan from REINZ says not every sale at mortgagee auction is a bargain and buyers should do their homework. Some properties might be offloaded because the owner couldn't afford large body corporate rates, she says.
Whose house is it anyway?
You can do all the research in the world, but without money, even the bottom rung of the property ladder is a step too far.
If you can't get enough of a deposit you could go into partnership with a mate in a similar position. But make sure the transaction is based on a legally binding agreement, not a drunken handshake down your local - however good your friendship.
Alternatively, you may be lucky enough to have parents willing to help you. Even then both parties should protect themselves by getting independent legal advice and a written pre-nuptial-style agreement.
Helen O'Sullivan says the safest option for both parties is for parents to borrow a set amount against their home and loan it to their child under a legally-approved written agreement.
Having a set amount means the parents are not guarantors, so the deal does not put their home at risk and there is an agreed repayment plan.
One woman settled on a $235,000 inner-city Auckland studio last month thanks to some financial support for her brother. Without it, she wouldn't have been able to get onto the first rung of the property ladder.
"The banks won't lend much money on a small apartment. You need 50 per cent deposit - it was out of the realm of possible," she says.
Faced with increasingly high rents, she asked her Wellington brother if he would consider helping her. He offered to use his house as equity for the mortgage and the pair have signed a written agreement for her to repay the the loan over 15 years.
Kiwifruit
KiwiSaver authority Mary Holm says the scheme is "definitely" the best way to save for a first home - even though it was set up primarily as a platform to save for retirement.
There are two ways to access your account.
If you've been a member for three years can withdraw all your contributions - and your employer's - to put towards a deposit on a first home. You won't get the $1000 government kickstart or member tax credits and you'll have to prove the withdrawal is for a house.
The second way is to apply for the first home deposit subsidy. This is open to people who earn below a certain amount - a combined income of $100,000 for two people buying a property and $140,000 for three or more.
The subsidy, administered by Housing New Zealand, gives those who have been contributing to KiwiSaver for three years $3000, four years $4000 and five years or more a maximum $5000.
If buying with someone else, who is also eligible, you can combine your subsidies up to a maximum of $10,000.
Employees must have been contributing at least 2 per cent of their pay. The unemployed or self-employed should check the Housing NZ website for regulations, says Ms Holm.
If the subsidy is used, the house cannot cost more than $400,000 in Auckland, Wellington and Queenstown Lakes District, or more than $300,000 elsewhere.
Ms Holm urged people to apply for the subsidy in plenty of time because the wheels of bureaucracy could mean they miss out on their chosen home.
"Before you go out hunting for a home, get in touch with Housing NZ."
She recommends anyone thinking about buying their first home to sign up to a low-risk Kiwisaver fund, where the money is typically invested mainly in bonds and bank deposits.
Riskier funds, which invest in shares and property, provide more opportunity for higher gains but also tend to fluctuate more, so the balance might be low at withdrawal time, she says.
And once you have bought your first home, Ms Holm advises people to continue putting money into KiwiSaver - but just enough to get all the employer contributions and tax credits.
Further savings should go into reducing your mortgage fast.
Having to wait three years before you can use KiwiSaver to buy a first home is the only real negative, she says.
One Auckland couple who moved into a renovated four-bedroom bungalow in Ellerslie last month said they wouldn't have been able to do it without accessing $20,000 from Kiwisaver.
"We'd made the decision to go backpacking before buying a house which meant we didn't have much of a deposit," said Victoria Black. "We had some savings and my husband's Kiwisaver money gave us just enough for a deposit. Even then not all the banks accepted our mortgage application, but without Kiwisaver we'd still be renting."
Cash battle
They might not advertise it, but some banks will still provide 95 per cent mortgages, depending on the circumstances of the applicant.
Good brokers and mortgage advisers deal with several banks so will know the range of lending products available and be able to find best deal for their clients.
Some of the best are registered financial advisers, which means they are governed by the Financial Markets Authority and subject to a disciplinary procedure if they provide a faulty service.
Financial adviser and chief executive of personal finance management service Wealthwise, Tracey Munns, encourages borrowers to shop around for the best deal.
The differences can be substantial. One bank offered one of her Wealthwise members a $1000 contribution to legal bills and .2 per cent off an advertised fixed rate. Another lender offered a $1000 contribution to legal bills, .4 per cent off a fixed rate and $1000 cashback.
Another first home buyer who was borrowing at 95 per cent for a $390,000 loan received $2000 in legal fees and had the low equity fee charge discounted from $3895 to $1950.
Alternatively, contacting your bank directly may help you to create a loan to fit your needs, for example if you're struggling to come up with a deposit, says Kiwibank spokesman Bruce Thompson.
"We'll deal with you direct to tailor your application to work with what's best for you and us to get you across the hurdle, such as on a lesser of gift deposit."
Best time to buy
Different experts make different predictions on different days. No one can be certain when the next property boom will be - or even if there will be another one.
But one thing they agree on? The best time to buy your first property is as soon as possible - you'd be extremely unlikely to find it decrease in value.
It's not going to be easy, and you almost certainly won't get exactly what you want, but depending on your free time, willingness to compromise and ability to get the best out of the banks, there's hope.
Andrew King from the Property Investors Federation is among those who reckon an upturn is coming. His advice is chastening but realistic.
"We've got about a year before the market takes off. If you haven't got a large deposit, now is the time to do something about it, for example increase your savings, get a second job, sell your car. If you're looking at going overseas, don't - save it for a deposit."
