Auckland's new apartment market dropped by 30 per cent during the second half of last year, according to a research survey by Colliers International.
The average asking price of new apartments is now $1.07 million, the research found.
This was a 3 per cent fall on the average asking price in the first half of 2017. The decrease was largely attributed to the CBD where the asking price fell from $1.3m to $1.1m.
Pete Evans, national director of residential project marketing at Colliers International, said that the prolonged election period caused a downturn for the entire Auckland residential market.
"Along with ongoing lending constraints and a continuing slowdown in the residential market, this adversely affected new apartment sales across all locations," said Evans.
Apartments in the city fringe (areas such as Epsom and the Eastern Bays) experienced price growth.
The city fringe is now the highest priced location in Auckland with an average asking price of $1.35m, an increase of 6 per cent on the first half of 2017.
"We are seeing a new level of high quality apartments in the city fringe, with larger, better designed and finished apartments targeted at owner occupiers," said Evans.
Prices were also going up in the suburban market.
Apartments in Albany, Hobsonville and Onehunga now have an average asking price of $862,000, an increase of 5 per cent on the first half of 2017.
The survey reported on 63 new projects with 5,099 apartments, half of which are selling off the plan, 44 per cent of which are under construction and 6 per cent of which that have recently completed.
Although the market downturn was helped by the election, Evans said it was to be expected as Auckland had seen such strong growth and is now returning to its traditional cyclical property market.
"It's typical that after a strong growth period of three years that the market will cool and stabilise, which is what occurred in 2017.
"The market for new apartments peaked in the first half of 2016 and has been decreasing ever since.
"The prolonged election period saw sales fall dramatically in October, November and December, which was extra challenging for developers in a market where lending constraints were restricting many purchasers."
Evans predicts that sales will pick up in 2018.
"Sales activity will be bolstered by banks being more active in lending, particularly to owner-occupiers of new apartments.
"The number of new projects that enter the market will be less due to feasibility issues for developers, meaning more demand for existing projects.
"The asking price of new apartments will remain stable, as developers look to control build costs by decreasing the size of apartments and projects as a whole.
"The new apartments under construction now that were designed and sold off the plan during the 'good times' in 2015 and 2016 will be the biggest and arguably best product in Auckland for some time."