This is where Hanover investors' money has gone...

The area that should be the Five Mile development near Queenstown. Photo / Supplied

Hanover investors' $500 million is tied up in a vast spread of partly built luxury housing estates and resorts - one still a hole in the ground - stretched throughout New Zealand.

From the shores of Lake Wakatipu to the Taupo area and across to Coromandel's beach fronts, this hard-earned money was loaned on some of the country's most beautiful but also most perilous property projects.

Holiday playgrounds, golf courses, lake and beach resorts designed for the wealthy were the target of Hanover's lending.

These are also the properties being hammered hardest in the downturn as banks call in loans and baches flood the market.

Hanover poured the money of 14,000 investors into the fluctuating Queenstown market as well as many North Island holiday zones.

David Henry, Hanover chairman, this week said investors would not now get all their money back as forecast by the company when it sought support late last year for its five-year moratorium.

Declining property values were to blame, he said, although he was not specific about where the real estate was, how much it had declined, who had valued it - simply that the downturn had made life harder.

Many properties with Hanover mortgages are suffering in the wake of the recession, which has seen a flood of waterfront houses hit the market. One of the worst is Five Mile, Christchurch developer Dave Henderson's $2 billion project for 10,000 people near Queenstown, where Hanover loaned money.

A great gaping hole was dug but nothing has risen since.

Construction work never started as Mr Henderson suffered financial problems and what was once meant to be New Zealand's most ambitious lake area real estate project came down to a depressingly pedantic list of chattels: an angle grinder, a portable toilet, three wheelbarrows, a water blaster, drop saw, two small concrete skips and dead man moulds and blocks. The project was reduced to that when the Deloitte receivers totted up the assets and liabilities.

Five Mile Holdings is in receivership at the behest of FMH Nominees, acting for Hanover Finance and financier NZ Castle. Property experts now think Five Mile will lie idle for years.

A collection of real estate known as the Axis properties includes the Matarangi Beach Estates, Jacks Point and Clearwater projects. All carry substantial debt, which is part of Hanover's problem now.

Unsold Coromandel sections at Matarangi, the partly completed Jacks Point near Queenstown, the troubled Kinloch golf course near Taupo and the disastrous Westpoint in Australia took some of the biggest sums from Hanover investors.

Hanover also loaned on units in Lily Zhong's Winsun Heights block on Vincent St, central Auckland, but that was sold in the country's single largest mortgagee apartment deal.

Meanwhile, the 3000sq m Paritai Drive, Orakei, home of Hanover co-owner Mark Hotchin has a present-wrapping room, wine room, music room, art room, games room, two family rooms and a 12-car garage.

This week, Campbell Live visited the $30 million home on its 4322sq m section and told of the array of rooms, starting the four-minute tour as "part-bunker, part-palace, part-carpark - and that's just the basement".

John Campbell wandered through the partly finished rooms, marvelled at materials for feature walls and enjoyed the vast waterfront views across the Waitemata to Devonport.

Mr Hotchin bought the land in 2005 and builders were this week still busy on the mansion.

Investors said their thoughts about Hanover, Mr Hotchin and the house were "unprintable".