Housing Minister Nick Smith says there are tentative signs that the Auckland housing market could be cooling down, but he will not be confident until prices have eased for six months or more.
Responding to the latest national house price data, Smith said today that the fall in the number of sales in the city could be an "early indicator" of a slowdown.
But he stopped short of saying it was the beginning of a longer-term trend.
"I would want to see a longer data series," he said. "I'm cautious about a single month's statistics."
Quotable Value's latest data, released yesterday, showed that house values were now rising more quickly in Wellington than in Auckland.
Real estate company Barfoot and Thompson also said today that the Auckland housing market was "subdued" in September and "a totally different market to 12 months ago".
They pointed to lending restrictions by the Reserve Bank as a cause of the trend.
Smith said the Reserve Bank's loan-to-value restrictions were just one part of the equation. The Government had focused strongly on increasingly supply in the city, partly through Special Housing Areas, and expected to see price inflation ease over the longer-term.
Labour's housing spokesman Phil Twyford said that unless the Government also took further demand-side measures, it was "extremely unlikely" that prices in Auckland would flatten or fall for a sustained period.
Immigration levels were still high, there was still a large housing shortfall, and interest rates were still low, he said.
Twyford said the QV data also showed that Auckland investors were now spreading beyond Auckland to Hamilton, Tauranga and Wellington.
"They've worked over so many suburbs in Auckland so exhaustively, they've mined them, and now they're moving on to other areas."
Smith said he was not concerned about the 21 per cent jump in prices in Wellington, because the market had been flat for many years.
In Hamilton and Tauranga, house prices were not significantly higher than the cost of construction, he said.
QV national spokeswoman Andrea Rush said price growth in many parts of Auckland was still fairly strong, but the "edge had come off" in the last month.
Properties were taking longer to sell, fewer houses were selling at auction, and more houses were being sold by negotiation, she said.
"All of these are signs of a bit of an easing."
Rush noted that after previous changes to lending rules by the Reserve Bank, the market had cooled off for three to four months before rising again.
Auckland's house values rose 15 per cent in the year to September, down 0.9 per cent on the previous month and lower than most other main centres.
ASB economist Kim Mundy said the housing market would remain subdued for the rest of the year, but buyers should not expect it to continue.
"In Auckland you could easily start to see a degree of price resistance coming into the market, prices could be making buyers sit back a think a little more about the choices they're making but LVRs are driving a lot more activity in the market at the moment."
Rise in average house values
Auckland - 15%
Wellington - 21.2%
Hamilton - 27.1%
Tauranga - 28.1%
Queenstown - 30.7%
(Quotable Value, year to September)