If Auckland's property prices follow that of our Australian counterparts in Sydney and Melbourne, where home values have plummeted, there's no doubt some homeowners will take a hit.
After holding steady for the past 18 months, house prices across Auckland fell in December with QV reporting average house prices down 0.4 percent year-on-year.
- Barfoot & Thompson reports drop in Auckland median house prices in 2018
- Auckland housing sales drop as foreign buyer ban kicks in
Barfoot and Thompson data also reflected a house price decline of 0.8 percent in December on 2017.
It is the first time the median price has dipped below the previous year since 2008 when the impact of the global financial crisis hit house prices.
Former ANZ chief economist Cameron Bagrie says this could be the beginning of a trend we'll see throughout 2019.
"What we have seen in the later quarter of 2018 was a turn from flat lining to the market now starting to weaken," Mr Bagrie told Newshub.
"Prices are now starting to go backwards. I don't think it will be a huge decline, but I think it's going to be a modest decline and the reasons for that; there are an awful lot of negatives out there."
Restrictions on foreign buyers, tightening bank credit and the flow on from what's going on across the Tasman will contribute to movement throughout the year.
Mr Bagrie, who is the founder of boutique research consultancy Bagrie Economics, says that for the past seven to eight years, Auckland property prices have been "hellishly expensive" - so a bit of modest weakening may not be a bad thing.
The big question out there, he says, is if Auckland is going to follow global trends?
As a rule, there is a correlation between New Zealand the Australian market, but not "one for one" and it's favourable differences that may prevent radical slips similar to those seen around the world.
Economist Shamubeel Eaqub told Newshub he doesn't see the same pre-conditions in New Zealand to trigger similar events taking place here.
Auckland has a shortage of houses whereas Sydney and Melbourne have an excess supply and banks have also become stricter about who they are lending to here.
"I think that's been the big handbrake on why the housing market has slowed and house prices aren't increasing as fast," he says.
"Instead of a correction what we've seen is everything else catching up. House prices are going sideways and the cost of living is rising and incomes are going up so that's kind of how the affordability is coming back."
Should the market show signs of dropping it which might not be too great for those people that are on the property ladder but it's "hellishly good news" for those people that are looking at it down the track because house prices are getting cheaper.
"The glass can be half full in regards to opportunities, if Auckland house prices fall that could be good for first home buyers, but the glass can be half empty if you jumped into the property market late in the cycle and you paid a high price for your asset, you've just lost a bit of equity," Mr Bagrie said.
The losers, should prices take a turn:
New to the market
If prices continue to fall, people who got in late in the cycle stand to lose equity or the deposits they put in.
"If you've bought recently, then you're not getting that free increase on your wealth that people in the last 10 to 20 years have got, because house prices were increasing and your debt was getting smaller or staying the same, you were getting wealthier all the time just by being in the housing market, that's no longer true," Eaqub says.
Bit off more than you can chew
If property was purchased outside of a household's means and over-leveraged are exposed.
If property was purchased outside of a household's means and over-leveraged are exposed.
"You can pretty quickly see your equity disappear in the house. When house prices go down, it tends to make things a little more difficult for small and medium-sized enterprises, because SMEs tend to tap the mortgage for working capital."
The winners
Planning ahead
"If you're looking over long-term, or want to own the house for 20 years, are you going to get too worried about where house prices go in the next one to two years? Probably not."
First-home buyers
"The downside to rising house prices is if they're moving up too far too fast, a lot of people get forced out of the market," Mr Bagrie says. "It has exacerbated income inequality."
For people who are looking to buy a house, it means that it's getting easier to save for a deposit.
"It's still expensive," Mr Eaqub said. "But at least it's not getting out of their reach, as fast as it was before."
Overall
Mr Bagrie's prognosis for the year ahead is that we're going to see a "modest decline" in prices but Mr Eaqub predicts another year similar to 2018.
"House prices will probably not do anything, probably going to keep going sideways, mainly because people are not going to want to sell, people have this idea fixed in their heads, my house is worth $X, and I will not sell below it, so unless you're forced to sell, people will just hang on," he says.
"I think that's where we're at, that's where we have been for the last couple of years, and I don't see anything in the next twelve months that's going to change that."
Newshub.
