House listings have plunged in the past month and would-be buyers are being forced to wait around for suitable properties to come on the market.
Realestate.co.nz recorded a 35 per cent drop in new listings in its property report for December, and warns major cities are heading towards a shortage of houses for sale in the new year.
Chief executive Alistair Helm said this was due to a lull after November's post-World Cup surge, the usual quiet end to the year, and followed a year-long low as sellers lagged behind recovery in the market.
"The problem with that is it's leading to shortages, particularly in Auckland," he said. "Asking prices are high and listings are down."
There were 2516 new listings in Auckland in December - down from 4459 in November.
"For three years nothing happened in the property market ... Sellers aren't rushing back when there's good demand.
Properties can be sold in two to four weeks if they're well-priced and well-presented."
Buyers were likely to have a relatively poor selection, Mr Helm said.
"The property market isn't a national market, or even a city one. It's down to the suburb, and in some suburbs people are just waiting for a listing because there hasn't been a listing in their price range for weeks."
Mt Albert, Mt Eden, and Grey Lynn were among the areas where inventories were particularly low and listings were quickly snapped up. "The inner ring of suburbs is where the activity is - or that's where the shortage is. Anything that comes on the market gets furious activity."
Mr Helm said he was expecting listings to pick up in the new year - but otherwise the market would feel a squeeze.
"If it does continue it could lead to an appreciation of prices because it's supply and demand. But I think the message is getting through to sellers, because the majority - 80-odd per cent - of people looking to sell are looking to buy as well.
"New listings are one of the clearest indicators of the health of the property market. The more new listings there are, the more fresh choices there are for buyers, which produces a less stagnant market."
Apartments have been among the slowest for listings, falling 44 per cent from November and 27 per cent from last year. Prices are also down 25 per cent from last year.
Mr Helm said there were few apartments being built, causing stagnation in the market.
The average house asking price in Auckland in December was $558,523, a change of less than 1 per cent from both the previous month and previous year. Inventory is at the equivalent of 24 weeks of sales, well below the long-term average of 33 weeks.
Nationally, Wairarapa's property market suffered worst with an 11 per cent drop in prices over three months and a 40 per cent drop in listings for the year.