Overseas investors are now selling more New Zealand homes than they are buying, but it is not because they fear a market crash, analysts say.
The drop-off has contributed to a slump in the sale of luxury Auckland homes, which has in turn helped push city house prices down.
Prices have now consistently fallen for 18 months. Upmarket North Shore has been hardest hit as median prices fell by up to $60,000 in the past year.
It comes as overseas citizens bought just 183 NZ properties during the June quarter, while selling 327, according to the latest Stats NZ figures.
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In the same period last year, they bought 1116 homes and sold 492.
The drop in buyers was expected after the Government's foreign buyer ban took effect in October, preventing most people without a NZ citizenship or resident visa from buying NZ homes.
But questions had been raised about whether the figures showed foreign investors were now spooked by the local market and selling off.
Nick Goodall, head of research for analysts CoreLogic, said the number of foreign investors selling actually appeared consistent with past years.
"Sellers appear to be still selling for all the reasons they would have in the past - whether it's because they need the cashflow or their lifestyle has changed - it's just that buyers are so significantly reduced."
Auckland house prices sliding amid fears of a fall in first-home buyers
Mind your manors: Prices drop in Auckland's wealthy suburbs
The drop in overseas owners comes as Auckland property prices are on the slide. The city's median price slumped to $825,000 in July — down 3.7 per cent on the same month last year.
Among the forces pushing prices down was a dramatic drop in the number of expensive Auckland homes selling.
Real Estate Institute data showed showed 722 fewer Auckland homes sold for $1m or more in the past year - a drop of 17.3 per cent.
There was also 55 fewer homes selling for $3m or more in Auckland over the past year, a 26.8 per cent decline.
The most expensive property sale this year has so far been the $13.9 million transfer of a "stunning hidden getaway" cottage near Arrowtown by Australian billionaire Tim Roberts to a company he controls.
This was well down on 2018's biggest property deal - the $27.5m sale of a Herne Bay waterfront home.
REI chief executive Bindi Norwell said the drop in high-end sales aligned with an overall market shift towards more affordable housing that was because of first home buyers becoming the most active buying group.
However, James Wilson, director of valuation innovation at analysts Valocity, said there was also no doubt the foreign buyer ban had hit Auckland's high-end property market.
This was especially notable in inner Auckland's exclusive suburbs and the North Shore.
While the ban doesn't bar all foreigners - Australians and Singaporeans can still buy in New Zealand and other nationalities can buy apartments in some new developments - Wilson said global uncertainty had further dampened interest.
Graham Wall, who sells luxury homes with his sons at Graham Wall Real Estate, said the ban was "certainly having an effect".
"In the last 12 months we would generally have sold two or three properties to Americans or English or Germans and they've gone," he said.
"But that's about it, I thought it would have had a bigger impact on our business."
He said the ban had also "taken some depth out of the market" and typically left sellers more open to negotiating prices.
"People used to ring us and say, 'I've got this property, it's only worth $10 million but you'll find us an American or a Russian that'll pay $15m or $20m' - well that doesn't happen any more," he said.
ASB senior economist Mark Smith said he expected the number of sales by foreign buyers to begin to slow as they hold onto properties longer now they can no longer buy back into New Zealand.
New Zealand more attractive to buy in than Australia
Australian investor Craig Bavinton currently has his eye fixed more closely on the New Zealand property market than that of his homeland.
New Zealand had fewer taxes and strong rental returns, he said.
Not only does Australia charge a capital gains tax on the sale of property, but it also charges a tax called stamp duty on the purchase of property.
"If I was to buy a million dollar investment property in Australia, I'm paying about $57,000 in stamp duty in Victoria compared to nothing in New Zealand," he said.
"Stamp duty for me is money that you never get back."
"If you combine that with the lack of a capital gains tax in New Zealand - provided you keep a residential property more than five years - then that is another huge plus compared to Australia."
New Zealand's tax regime also generally compared well to other overseas markets, such as Canada and the US, he said.
Having invested in New Zealand for about 20 years, Bavinton was also able to cash in on the recent decade of skyrocketing house prices.
Holding money in US and Australian dollars meant he had to time his NZ property purchases with fluctuations in the currencies.
"On a couple of my properties, I've been able to double my money in the space of about five years if you look at it from a currency perspective as well," he said.
New Zealand was still offering good rental returns in areas, such as Northland, he said.
"I can get 5 per cent debt return on residential and commercial in New Zealand, whereas people are buying in Melbourne at 3 per cent."
Bavinton currently has three commercial and three residential properties valued at about $4.3m.
Aside from slowing capital gains, the main thing holding investors back now were tighter lending restrictions by banks, he said.