Thousands of home owners are slipping behind on mortgage payments, while other would-be buyers are rushing to get finance.
Reserve Bank data shows 10,905 homeowners were in arrears with their mortgages at the end of the first week of August.
More than 240,000 mortgage payments have been missed since April - worth about $2.2 billion.
This is in addition to more than 83,000 mortgage deferral requests lodged since the end of March, 13 per cent of all mortgages.
Kevin McHugh from Finder - a home loan comparison site - has analysed the data.
"We're still seeing a huge number of people in arrears, and it's not clear exactly why," he said.
There are huge numbers of applications for mortgage deferrals and not all will be approved, McHugh said.
Despite the thousands in arrears, the number has actually fallen from around 14,000 in April.
"The suspicion is that those who did have problems have now moved on to the deferral scheme."
But it's a "staggering number", he said.
McHugh said if mortgage arrears increase, that could make lenders more cautious and people facing hardship should discuss options with their lender.
The mortgage holiday scheme has been extended to March next year.
While some may be overstretched, others are rushing to get finance to buy.
A mortgage broker at Mortgage Link Hawke's Bay, Peter Barry, said would-be buyers are now waiting two weeks for an appointment.
"It's the complete opposite of what we were expecting ... there are a huge number of inquiries about finance."
That means banks are inundated and it is slowing down pre-approvals, he said.
Most of those seeking finance are first home buyers who are often paying a 10 per cent deposit with their KiwiSaver and the government's First Home Grant.
"They're obviously looking at the amount of rent they are paying in the Hawke's Bay and looking what the interest rates are. The majority of the time, mortgage rates and insurance are on par or less."
CoreLogic said first home buyers have hit a record high for their share of the market.
But its senior property economist, Kelvin Davidson, said investors are still dominating the market at 27 per cent - 3 per cent more than new buyers.
"You hear a lot of upset from landlord and investor groups - the costs have been pushed up by government in recent years and there is more hassle - but it clearly hasn't changed actual behaviour."
Davidson said while demand is high, listings are lower than usual and that is in part because owner/occupiers are staying put.
He said the market is likely to shift again when the wage subsidy stops.