Sales at Auckland's biggest real estate company have hit a seven-year low.
But prices aren't yet falling, says Barfoot & Thompson, because sellers are declining lowball offers.
September sales were down 15 percent on August and 37 percent on a year earlier. Two-thirds of all sales in Auckland were for homes above $750,000 - keeping the average sales price of $928,213 only 1 percent above what it was a year ago.
"We've seen sales on average falling away about 10 to 15 percent of sales volume numbers, but the prices are remaining exactly the same," managing director Peter Thompson told The AM Show on Thursday.
The median Barfoot & Thompson sales price in Auckland is now $860,000 - well behind the average due to the large number of high-end sales. The official Government definition of 'affordable' is $650,000.
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He said the primary reason prices aren't falling from recent record highs is the lack of supply.
"Migration's still coming in, interest rates are very reasonable and look stable - it's the lack of supply. Until we get the supply, there's not going to be a lot of movement in prices."
In recent years, Auckland has only been building half the number of new houses it needs to keep up with population growth. Both of the major parties have promised to fix the lack of supply - National through market measures, Labour via its Kiwibuild policy.
The political uncertainty is partly to blame for the sales slowdown, said Mr Thompson, with sellers and buyers waiting to see who's going to form the next Government.
"Unless it's likely a Government's going to be automatically re-elected, there's no impact. But when there's a chance there is a change - and certainly this year is one of those - the market always slows down over the election."
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His recommendation to the next Government is to ease up on the loan-to-value restrictions [LVRs] for first-home buyers, calling the rules the "right thing to do" at the time they were brought in, but are now locking youngsters out of the market.
QV spokesman David Nagel told The AM Show lifting LVR rules, if not done carefully, could backfire on first-home buyers.
"If they are reduced, there will be a lot more first-home buyers that can enter the market, a lot more investors too who'll be able to buy their second, third, or fourth home, so that will have a big impact on the future property market."
First-home buyers looking further afield will find houses in the regions are not as cheap as they used to be either. Prices in places like Kawerau and Greytown flatlined for several years after the global financial crisis, but in the last year shot up by almost a third.
"The bones of the market are still very strong," said Mr Nagel. "We've got very low interest rates still, we've still got good migration data coming through - although that's likely to fall off over the coming years. Everything's positive - strong economy that's going to continue to be that way.
"A lot will depend on what happens I think with the LVR restrictions and what a new Government will do to try and influence the Reserve Bank to maybe reduce those restrictions."
Contrary to popular belief, Mr Thompson said real estate agents are not fans of the boom-bust cycle the property market sometimes goes through.
"People think it's great for real estate agents - in fact, it's the opposite. We want a steady market, not and up-and-down market."
He said the past few years' rises in Auckland have been "not sustainable", but doesn't think a market crash is on the horizon.
"If it drops, it will only be about 1 or 2 percent."