It is still a good time to sell, say real estate experts, even though new "frugal" buyers may be emerging.
A new kind of first house buyer may be emerging in the Auckland market - one who is more frugal and level headed.
Keith Niederer, general manager of real estate company LJ Hooker, says despite this there are a lot of buyers with money to spend, making now a good time to sell.
He says he expects more properties to be offered for sale in 2018, especially as the government's tax working group has been asked to look at a capital gains tax (although this is expected to exempt the family home).
His message for first home buyers however is stark: "They have to decide whether they want a home or an extravagant lifestyle.
"If they want to own a house, there is no use living the life of Riley and going off to Queenstown for the weekend," he says. "In recent years a lot of would-be first home buyers have been in good jobs and want the flash car, lifestyle and house at an early age.
"Their mentality has been 'I need it now'. Well maybe that's got to change and people need to be more frugal and level-headed in their approach; get back to the old ways of saving and building up a deposit starting by cutting up the credit cards.
"Buying a house is tough, but it's tough whether you are in Auckland or Sydney or Melbourne or China," he says. "House prices have ballooned but incomes haven't, so people have got to cut their coat according to their cloth."
Niederer says there are signs the Auckland housing market is back to "normal" and believes the days of big capital gains in property are over – although he says most people realise there won't be much of a drop in prices either.
"The typical profile of buyers now may well be a couple who have been in a house for six or seven years," he says. "By being frugal and level-headed in that time they have built up good equity and are looking to upgrade."
He says tougher lending criteria imposed by the banks is also having an impact: "People are looking to buy, but the banks have stronger loan-to-value (LVR) and other restrictions so they are less tolerant and not as accommodating as in the past.
"They are looking to reduce their exposure to risk," he says.
"There are people out there with money who are looking to buy and there will be opportunities because a lot of people may be considering a move out of Auckland," he says. "The roads are full, costs are high, the government is bringing in a regional fuel tax (expected to apply from July) and there is a lot of frustration in Auckland.
"When Aucklanders have been away for their holidays in the regions they realise there are opportunities for lifestyle and house affordability and are more open to moving, it's what happens at that time of year. So we might see more stock coming on."
Niederer does not expect the big increases in Auckland residential property values will have much impact.
Auckland Council last month revealed the total value of all residential properties across the region showing the average has jumped by 45 per cent since the last revaluations in 2014 – and taking the average house value in the city to $1.076m. Papakura, Papatoetoe-Otara and Waiheke Island were above the average, having risen in value by more than 60 per cent.
Council chief economist David Norman said the rises reflected Auckland's strong population growth had not been matched by new house builds while low interest rates allowed people to bid up prices and the Unitary Plan added value to properties that can be intensified.
The revaluations followed the release of Real Estate Institute (REINZ) figures for October showing median prices across all companies in Auckland fell by 3.2 per cent year on year to $850,000 – the biggest fall since December 2010.
But Niederer doesn't think the revaluations will lead to much movement in prices: "Properties are only worth what people will pay for them; a valuation is just a number."
He is also uncertain whether the government's KiwiBuild scheme in which it plans to build 100,000 new houses within the next decade (half of them to be in Auckland) will make much difference, at least in the short-term.
"I actually think they are on another planet if they think they can build that many," he says. "We all know how long it takes to get consent through bureaucratic red tape for simple renovations or extensions let along a new building. It can be a lot of hassle."