Auckland has become a buyer's market, says ASB chief economist Nick Tuffley.
Responding to data from Quotable Value and Barfoot & Thompson last week, Tuffley said it was clear that there was an overhang of listings in the market.
The market had peaked about a year ago and had been steadily tracking down ever since, Tuffley said.
"What we have seen is just more homes sitting on the market and that number is now about 60 per cent higher than what it was a year ago so the demand and supply balance is certainly shifting with more properties available for viewing and giving buyers a lot more choice."
It was still the case that in the big picture Auckland still did not have enough homes being built to meet its population growth, Tuffley said.
But at the sharp end of the market - people buying and selling - there was a flood of regular listings coming onto the market with fewer sales being cleared.
"We've got this overhang in terms of listings so buyers also have that ability to pick and choose and take their time, it has swung to be a buyer's market," he said.
"That fear of missing out which sometimes drives people to aggressively bid up and try and jump on properties quickly, those dynamics have gone. But the background of the underlying shortfalls is certainly putting a floor under prices."
QV's June data for the Auckland market showed Papakura values fell 1.8 per cent; Waitakere 0.6 per cent; Manukau northwest, Franklin 0.1 per cent; and Auckland City east and Auckland City south fell 0.5 per cent.
Year-on-year growth for the Auckland region was flat while New Zealand-wide growth had slowed to 8.1 per cent.
Figures from Auckland's largest real estate firm Barfoot & Thompson were even more downbeat, showing the average sale price in June dropped 3.1 per cent on the average for the previous three months, and was only 0.6 per cent higher than it was 12 months ago.
Looking out longer term, Tuffley said he expected Auckland prices to hold up and even increase further.
"The reality is we are not going to be catching up to the population growth for several years, in terms of the amount of building," he said.
In the short term he said he expected to see a bit more downward price pressure or more people taking their homes off the market, or fewer people putting homes on the market.
"A combination of those few factors will see it start to balance out over time but over the next few months it really looks like we'll see it staying flat or pretty soggy on the price front."
While buyer behaviour had changed, sellers had not yet adapted, Tuffley said. He expected to see them adjusting and being a bit more realistic with asking prices.
"Even thinking about whether they need to sell. "
On Wednesday the Real Estate institute of New Zealand (REINZ)
will release its figures for June.