House prices have fallen in Auckland and growth is slowing across the country, according to a new report.

The latest QV figures show annual growth dropped from 3.5 percent to 2 percent compared to the same time in 2018.

General Manager David Nagel told Newshub it's expected for the middle of winter.

"Listings are down and there's a real shortage of good quality listings, we've not seen a lot of transactions."

The rate of quarterly growth has dropped to 0.1 percent.

It's a worse story in Auckland though, where the value of the central suburbs have dropped by 3.3 percent year-on-year.

Nagel said there are a number of contributing factors to the drop.

"That's probably due to both affordability challenges and the foreign buyer ban."

But it's good news for first home buyers, who are snapping up properties in outer city suburbs. Over half of purchases in Wellington's more rural suburbs are being made by new homeowners.

"They're enjoying not having such a lot of competition out there, affordability issues obviously impact them as well but a lot of them are able to release some funds from their KiwiSaver schemes," Nagel said.

Newshub.