COMMENT:

Q: As you're probably aware, the housing market has turned in Auckland in particular. Although we have only seen mild house price declines, auction clearance rates are abysmal and house sales volumes are tanking.

One only has to look at the increased volume of banking adverts targeting first-home buyers, recent mortgage rate wars, and the dire state the Australian market finds itself in, to know the banking and real estate sectors are concerned.

Unfortunately, based on recent mortgage data it would seem first-home buyers are entering this overheated market in greater numbers. This concerns me as I fear there could be many that are facing negative equity in 12 to 18 months.

A: Trying to time any market — picking when it's a good time to buy or sell — can be a fool's game. But still, only a different fool would deny that the Auckland market has slowed.

For those who don't know what negative equity is — after all, it's a term we haven't heard much in recent years — it's when your mortgage is higher than the value of your house, because house prices have dropped.

It's probably less likely to happen these days, because mortgage lenders tend to ask for bigger deposits.

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