Aucklanders are expecting their homes to decrease in value for the first time in a decade.
And ASB's latest Housing Confidence Survey places the blame on a tax that doesn't exist - the mere possibility of a broad-based capital gains tax was enough to spook buyers.
"It really seems to have had a big impact," ASB chief economist Nick Tuffley told The AM Show on Monday.
"It's not just Auckland - we saw it around the country in places where there was actually quite a lot of heat in other parts of the market, and they too reacted quite strongly."
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The Government's Tax Working Group's recommendation of a capital gains tax was rejected by the Government, but only after months of limbo.
"I think people can sit back, [breathe] a bit of a sigh of relief now, and look at those lower mortgage rates," said Tuffley. "We might see that sentiment start to turn around."
A net 12 percent of Aucklanders expect prices to fall in the next few months - the first time sentiment has turned negative since 2009 and the depths of the global financial crisis.
Tuffley says despite the capital gains tax being canned, there are plenty of other ways the Government is keeping a lid on prices - including the Healthy Home Bill, ring-fencing tax losses on rental properties, and restrictions on foreign buyers. Auckland is expected to be hit the most.
Buyers are still on the fence however on whether it's a good time to snap up property, despite stagnating prices.
"It is a little bit more affordable - or less unaffordable might be the best way to put it, " said Tuffley.
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If prices don't come down, it'll be because owners are afraid of taking a loss, or missing out on future gains.
"When the market is quiet, the people who don't need to sell don't put their house on the market. It means prices don't tend to fall that quickly."
Outside of Auckland, there's confidence house values will continue to rise across the North Island (net 25 percent positive) and the South (27 percent).
Nationwide, sentiment is 11 percent in favour of prices going up. That figure hasn't gone negative since the global financial crisis.
Meanwhile, rental prices have hit a new all-time high of $500 a week according to Trade Me, up 5.3 percent in the past 12 months.