Auckland's housing market no longer flatlining as new data shows prices are actually falling.
Auckland house prices are undeniably on the slide with concerns first-home buyers are now also retreating from the market.
The news comes on top of falls in the number of luxury houses for sale and new data that shows consistent property price falls across the market over the past 18 months.
The city's median house price hit $825,000 in July, according to data released today by analysts OneRoof-Valocity.
This was down 3.7 per cent on the same month last year and more than $50,000 compared with the market peak of $877,000 in January 2018.
House prices have now fallen every month this year when compared with the same month in 2018, and have risen only once in the past 17 months.
Valocity director of valuation James Wilson said it was clear prices were actually falling - rather than just holding steady.
"If you look at the Auckland market over the past 12 months, while the overall percentage decline has been relatively small – it is still a decline," he said.
"In the context of the last 10-year property cycle, it is the first time we've had this consistent softness or decline in a market as large as Auckland."
Yet while prices were falling consistently for the first time in a decade, they are yet to drop away sharply.
Mind your manors: Prices drop in Auckland's wealthy suburbs
July prices were still more than 40 per cent higher than five years ago, OneRoof-Valocity data showed.
Among the forces pushing prices down recently was a dramatic drop in the number of expensive Auckland homes selling.
Wilson said nearly 75 per cent of all homes sold in Auckland in the past three months were purchased for less than $1 million.
Sales of homes for $1.5 million-plus accounted for only 7.6 per cent of all sales.
The absence of top-end buyers had helped drive down prices in upmarket regions, such as the North Shore where median prices fell 5.5 per cent, from $1.09m a year ago to $1.03m last month.
This had earlier left first-home buyers and investors as the most active buying group.
But Owen Vaughan, editor of property website OneRoof, said the latest data showed prices were now also cooling in regions popular with first-home buyers and investors, such as Waitākere, Papakura and Rodney.
The number of first-home buyers taking out new home loans also fell last month, indicating they may also be retreating from the market.
"First-home buyers are the biggest buying group in Auckland, but there is a limited pool of housing stock in the city that's within the affordable price bracket - $500,000 to $850,000," Vaughan said.
"If first-home buyer activity drops, then the worry is there'll be no buyer group to fill the void."
Despite these concerns, Valocity's Wilson was not tipping house prices to tumble.
Auckland still had a shortage of housing and more new residents arriving in it than leaving, he said.
Banks were likely to continue offering record low interest rates to homebuyers given most pundits expected the Reserve Bank to further cut the official cash rate to a fresh low of 1.25 per cent today.
Nick Goodall, the head of research for analysts CoreLogic, backed this, saying it was "clear values are going backwards in Auckland" after the CoreLogic QV House Price Index showed city prices had fallen 2.6 per cent in the past year.
Auckland houses were now also taking longer to sell, while the number of homes listed for sale in the city was the most it had been in five years, he said.
This meant the "strong fundamentals" propping up Auckland's house prices were likely to prevent a crash as had been seen in some Australian cities, but at the same time "it was hard to see where a lift in Auckland prices" would come from, he said.
Property commentator Ashley Church was more positive. He said it was fair to describe Auckland house prices as holding steady or flatlining rather than falling.
This was because anyone who talked about flatlining prices typically meant the market may experience small falls in prices but not consistent drops of 5-6 per cent or more.
"Just for the purposes of definition, a crash in the market would be a sustained drop of more than 20 per cent ... and we are nowhere near that," he said.
"So by any definition we are still very much on the flat period of the cycle and I don't see anything to indicate to me that is going to change."