ANZ's New Zealand chief executive David Hisco thinks the Auckland property market probably peaked last year but that conditions are still difficult for first home buyers.
Hisco, who heads up the country's biggest lender, hit the headlines in July last year when, in an opinion piece published in the Herald, he said Auckland house prices were over-cooked.
"In the quick snack media world we live, sadly many are making decisions based on the last headline or quote rather than research and facts. Here is a fact: property markets can and do go backwards," he said at that time.
Hisco, in an interview with the Herald after the company's result last week, said: "Certainly things have eased since last year. I think that we hit the top of the market when I said that, but things have eased off a bit since then."
"It is still hard," he said.
"If you are trying to buy a home it's never easy. I would not sit here today and say that everything has changed for first-home buyers. It still chews up a fair bit of income for people to buy a house."
Hisco said predicting the future path of interest rates was a bit like predicting the weather.
"I feel that the bottom has been and gone and yet world conditions are still reasonably flaky," he said.
He said long awaited rate hikes from the US Federal Reserve would see interest rates move higher.
"I can't see what would move interest rates up by 3 per cent in a year," he said. "But then again, no one ever does."
Westpac said in a commentary the housing market slowed on all fronts between January and July of this year.
Prices fell steadily in Auckland and Canterbury, while in Northland, Waikato and Bay of Plenty price gains slowed to a standstill, and although prices kept rising in the rest of the country, they did so at a slower pace than last year, Westpac said.
The rate of market turnover fell by around 20 per cent across the country, and the stock of unsold homes sitting on realestate.co.nz rose, although that was mainly in Auckland. Finally, the average time taken to sell a house lengthened.
"In our view, the main reason for the market slowdown of 2017 was a lift in mortgage rates," said Westpac chief economist Dominick Stephens.
Two-year fixed mortgage rates jumped 0.35 per cent at the start of the year - enough to add more than $2300 per annum to the interest bill on an 80 per cent mortgage over a median-priced Auckland house.
"That was a serious whack to affordability - or the profit/loss calculation for a property investor," Stephens said.
The Reserve Bank said early this year that housing market vulnerability, bank funding pressures and dairy sector indebtedness were risks to the country's financial stability.
The central bank has specifically raised concerns about indebtedness in the rural sector.
Fonterra now has a milk price forecast of $6.75/kg of milksolids for the current season, up from $6.12/kg in 2016/17, but farm balance sheets came under severe pressure when prices slumped to $3.90/kg and $4.40 kg - well below most farmers' break even points - in each of the preceding two seasons.
ANZ is the country's biggest rural lender and Hisco said the "things are certainly better than they were" thanks to higher milk prices.
"There are still a lot of farmers out there who are carrying high levels of debt, and who will be looking forward to reducing that level of debt," he said.
"We are working with our farmers to make sure that they put themselves in a position where they can manage their way through a low milk price phase without putting themselves in extreme difficulty."
Overall, he said farm debt remained reasonably high.
"It would not bother me if it came down a bit."