Don't panic, the housing bubble hasn't popped. But it has released a bit of hot air.

The latest Quotable Value New Zealand statistics show Auckland house prices fell in the last quarter - a tiny, tiny bit.

It will provide cold comfort for would-be first home buyers. The madness of the past decade - which according to the latest QV estimates has seen Auckland prices rise 91 per cent - won't be unwound in a hurry.

As 0.2 per cent fall in Auckland prices over three months is, in real terms, more of sideways shuffle.


But something must have changed. We have a more normal-looking market now.

If it treads water for a couple more months we might even see annual growth dipping to single digits.

Fundamentally, we know that Auckland's supply and demand issues have not been resolved though.

Building consent issuances are rising but we are still short of the 13,000 new dwellings that the Auckland council estimates are needed every year just to keep pace with growth.

Meanwhile immigration hasn't eased. Auckland's population is growing by nearly 50,000 a year. If anything that 13,000 estimate is looking light.

And while interest rates are tipped to rise, they really haven't much yet.

So what has changed?

Well, the Reserve Bank's tough new Loan to Value Ratio (LVRs) rules targeting investors have kicked in and have taken some buyers out of the market.


Industry insiders note that it's most likely the "mum and dad" investors who needed the bank's money, big property investment players haven't been too troubled by the lending limits.

There is also some speculation within the real estate industry that many of the speculative buyers from mainland China may have exited the market in the past few months.

Given New Zealand never managed successfully to measure how many buyers from Beijing, Shanghai, or Chengdu were active here, their departure from the market will also remain anecdotal.

But we do know that Chinese Government concern about capital flight (ie the amount of money its citizens were investing offshore) prompted a policy shift last year. That's understood to have caused a ripple in markets around the world.

The bad news - for those wanting some balance and opportunity returned to the Auckland market - is that the LVR effect and Chinese policy effects are both likely to be temporary.

Still, we have some respite. We needed it.

It offers a glimmer of hope for first-home buyers - those who were already realistically in the hunt at least.

In a plateauing market there will be properties that don't attract a bidding war.

Somewhere, outside of the hot school zones, on a rainy Tuesday, someone might actually find a bargain.

Buying a house in Auckland will still be tough and it will still be inaccessible to many.

But the pause does buy some time to debate the issues in an election year.

Even the NZ Initiative - a traditionally right-leaning think tank - has identified the imbalance of the housing market as the biggest cause of inequality and poverty in this country.

If we have a window to play catch-up, let's use it.