Last year, 3024 New Zealand houses were sold in mortgagee sales - a 500% increase on 2007 and the highest number since records began. One of those forced sales involved the Corish family's Otago Peninsula "dream home", which has a rateable value of $3.75 million. Mark Price spoke to a family member about what went wrong.
Fans of the television series Grand Designs will be familiar with the script.
It begins with someone's idea for an unusual, interesting or extravagant home.
Tensions follow as architects and builders try to meet the expectations of the owners.
Then budgets blow out.
And then, somehow, everything turns out all right.
For the Corish family, formerly of Dunedin and now of Oamaru, their grand design at 30 Camp Rd followed the script fairly closely - except for the end.
They have lost their home and a great deal of money besides and their grand bluestone house on the road to Larnach Castle will most likely soon have new owners, who will probably pay somewhat less than the $2.9 million the house cost to build.
A Corish family spokeswoman, who did not want to be named, said the decision to build a 900sq m, two-storey home on their 17ha of land was made in 2005 when they were offered a good price for their former home nearby.
"We had $1.355 million to spend . . . this is going to be marvellous. This is going to be our dream home, mortgage-free."
They employed an architect recommended to them and gave him "some rough things" and asked "Can you build this?"
The spokeswoman said they were led to believe the cost would be $1.35 million, which meant they would have $5000 left over "to go out and have lunch".
"But, knowing what architects are like, we put in a $200,000 contingency which we could get from the bank easily, just in case."
However, there was no "official quotation".
Before building began, a dispute with neighbours over the purpose of the house cost the family $30,000 in legal fees, but that issue was resolved, and in 2005 the build began.
By the halfway stage, in mid-2006, "all the money was gone", the spokeswoman said.
She blamed the architect.
The architect said when contacted it was the first he had heard of his client's dissatisfaction and he denied responsibility for the financial problems the family had encountered.
"That's probably quite an imaginative way of covering themselves in terms of how they got themselves in such an embarrassing situation.
"This was a project that they really ran themselves, you might say... In fact, we were only responsible for a part of the design."
The spokeswoman said the family were advised by their accountant to sell the shell of the half-finished building.
"Well, no-one sells a shell and gets any money - ever. So, we said, 'We'll have to go to the bank and hock up'.
"So, we hocked up to the tune of $1.6 million."
"We thought, what can we do? We've just got to get on with it. We're practical people, so we decided the minute it was finished we would obviously put it on the market for sale, because we did not want to carry that level of debt."
The building continued, as did the use of quality materials, such as bluestone from Timaru. The property had its own bluestone quarry, but the family could not get approval to reopen it.
Stonework the family expected to take two or three months to finish took 18 months and the spokeswoman said that was an area where costs "blew out".
The house was on the market during 2007, but did not sell. Then, the property market crashed in 2008 and buyers disappeared.
By 2009, the family were struggling financially.
"We've had to borrow from Paul to pay Peter to pay Joe . . . then, of course, the banks started to get very, very stroppy."
The banks were "very happy" to lend them $1.6 million and happy while they continued to pay the mortgage "religiously" for three years.
But, by September last year, the family could pay no more.
"They said 'Well, sorry about that. We'll take the house'."
The banks then moved to have the house sold to recover the debts, with the deadline for vendors last Wednesday.
The offers were now being considered by the banks.
The spokeswoman said if the family had known the cost in the beginning, they would not have gone ahead.
"This started off as a dream home and turned into the build from hell."
Their business had "basically gone down the gurgler as a result", but "every contractor on that build, every family in Dunedin who had anything to do with it, has been paid 100%".
"The only people who have ended up carrying the incredibly huge, unnecessary debt is us."
The family, originally from England, lived in the house for two years, but had moved to Oamaru "to lick our wounds".
"We're not destitute... we've cobbled a few things together just as a survival thing."
The remarkably cheerful family spokeswoman said the experience had been "horrendous", but it was not to be compared with the experience of those who had lived through earthquakes or tsunamis.
"It's money, and money comes and goes. It's like breathing: in and out."
